One of the most significant developments we have seen over the last five years has been the emergence and growth of litigation funding. Now it hasn’t been an easy road for litigation funders, but since the High Courts decision in the Foster case the number of funded litigation cases has increased sharply. I can tell you a large proportion of our big ticket cases see us acting for defendants to class actions particularly in the shareholder space and product liability case. Nearly all of them prosecuted on the back of the dollar of the commercial litigation funder. That just wasn’t happening five years ago, and it’s really significant, because many of these cases fall into the – bet the farm or – bet the company – category. And it’s not just on the defendant’s side of the equation that we are seeing the impact of commercial litigation funding.
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It used to be the case that litigation funding was the province of the impecunious plaintiff an insolvent company with a decent claim but nowhere else to go. I can tell you that slowly but surely, but definitely, we are seeing large corporations, well funded corporations availing themselves of the benefits of litigation funding. It would be uncommon these days to find a class in a shareholder class action which didn’t have within it a number of institutional investors. We all know that since time began boards have been balking at litigation because of the unpredictability of the litigation spend and because they do not know just how much an adverse cost order may see them having to pay. Litigation funding is one way to mitigate that risk and large corporations are slowly coming to realise that. So don’t be surprised in the future if you see some large corporations availing themselves of litigation funding to prosecute at least some of their claims going forward.
Against this background it’s hardly surprising that we are seeing calls for the regulation of litigation funding in Australia. Just as there have been overseas. I think only last week in the United Kingdom a Code of Conduct for litigation funders was published. It’s the product of a working party of the Civil Justice Counsel. And it contains provisions which regulate self regulate mind you, things like the amount of capital which the litigation funder must have, the circumstances in which the litigation funder may withdraw funding for a particular case, and the degree of control exercisable by the litigation funder in relation to the conduct of a particular case. We wait to see in Australia whether the calls for regulation will be heard and what if anything will be done. But I guarantee you this, litigation funding is here to stay and it will continue to fuel the litigation bonfire going forward.