By: 28 April 2017
Volume of commercial claims in UK set to expand due to better funding options

The volume of commercial claims the UK is set to expand at a significant pace due to the growing range of options to fund cases.

Georgina Squire, head of dispute resolution at Rosling King (RK), has said that the increase of funding options such as litigation insurance, third party funding and companies specialising in buying litigation in order to fund and pursue claims themselves is set to breathe new life into litigation work for lawyers.

Squire was speaking at a seminar on the subject in London for private equity and other investors, where delegates were told that 2017 is set to be a record-breaking year for funded commercial disputes. Since its arrival in the UK from 2011 onwards, third party litigation funding has gradually become recognised as a key tool for many litigants pursuing often substantial damages claims.

Another speaker, Robert Hanna, managing director at Augusta Ventures, which specialises in finance for litigation, said that new funding options were levelling the playing field in “David v Goliath” cases and enabling companies and organisations to pursue cases they would not have been in a position to pursue previously.

His comments were echoed by Michael Lent of Lakehouse Risk Services who described the “huge potential” that litigation insurance and funding now provided. He also highlighted how After the Event Insurance (ATE) was increasingly becoming tactically useful for lawyers pursuing a claim to send a message of strength to the opponent.

While these two funding options are perhaps better known to lawyers, a third ‘shot in the locker’ is the emergence of companies specialising in buying litigation as a package which it will then pursue.

Gwilym Jones of Henderson & Jones, a specialist firm which purchases existing litigation either for a price or a share of recoveries, mainly from insolvency practitioners, explained that the emergence of companies buying litigation as a package to then pursue was also increasingly being understood and utilised by claimants and investors.

A spokesperson for Rosling King said: “More flexible fee arrangement for lawyers will also enable more claims to be run.

“There are significant issues for lawyers to consider. For example, when is the best time to seek funding or insurance? Who is in control of the case, the funder or the lay client? However it is funded, a sound legal foundation will need to be in place for a successful claim.

“We are moving into a new era. More cases are going to be pursued and legal remedies are not going to be solely the preserve of those with very deep pockets. The toolkit for claimants has become more flexible and forceful. That will certainly send a strong message to those who believe that protracting disputes and ‘toughing it out’ will win the day.”