Benedict Mackenzie LLP views on litigation funding

The advent of litigation funding is presently a major issue facing all professionals.

Two partners in the firm, when acting as Liquidators of Stone & Rolls Ltd, obtained such funding.

This case has received considerable coverage in the national press and professional publications over the last two years.

The case was eventually concluded, following a decision handed down in the House of Lords on 30 July 2009, when the Joint Liquidators' appeal against the striking out of the claim was dismissed by a majority of three Law Lords to two.

Despite the judgement the funders fully indemnified the firm against the costs which had been incurred by both sides to the dispute.

We still consider that litigation funding can avoid injustice to claimants who have a strong case, but do not have the means to bring the claim (a particular issue for liquidators seeking to achieve a recovery for creditors).

Litigation funding should not be confused with the US contingency model which has seen some unbelievably frivolous claims brought to court.

To secure funding from a professional third party funder, a claim must be sensible and above all have a strong prospect of success. Claims without merit will, quite correctly in our view, not attract any backing.

For advice in this specialised area please contact the partners at our London office.