New Code for Litigation Funders

Civil Litigation

The Civil Justice Council (CJC) has published its much-anticipated Code of Conduct for Litigation Funders and the Rules of the Association for the Association of Litigation Funders in England and Wales. The Rules require every member of the Association of Litigation Funders for England and Wales to abide by the Code to the extent that it applies to them.

Lord Justice Jackson, speaking at the launch in the Royal Courts of Justice on November 23, said the code satisfied his recommendations, that there be proper provision for capital adequacy, that the funder should not be entitled to terminate the funding agreement mid-litigation without good reason, and that the extent of the funder’s ability to influence the litigation and any settlement negotiations should be properly restricted and defined with clarity..

Jackson LJ said he anticipated that solicitors will be advising clients only to enter funding agreements with litigation funders who sign up to the code and comply with its provisions.

“I express the hope that in the future litigation funders will be able to support a wider range of litigation than at present, including group actions and claims of lower value,” he said.

He named a range of litigation funding options that would be available if his final report is implemented - contingency fees, a supplementary legal aid scheme, and “hopefully” a contingent legal aid fund, as well as conditional fee agreements without recoverable success fees.

Michael Napier QC, chair of the CJC working group responsible for the code, said the arrival of the code and the Association “provides a welcome wrapper of confidence to litigants and lawyers who choose this developing method of funding civil cases”.

Lord Neuberger, Master of the Rolls and chair of the CJC, said: “It is an important development and will help to foster standards of best practice and to promote greater transparency among the providers of litigation funding services to the benefit of the consumers of these services.”
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