This week the UK Government responded to questions concerning the regulation of the third party litigation funders posed by Conservative Peer Lord Hodgson of Astley Abbotts.
In response to the written parliamentary questions, justice minister Lord Keen of Elie clearly stated that “The Government does not believe that the case has been made out for moving away from voluntary regulation, as agreed by Parliament during the passage of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.”
As a professional third party disputes funder and member of the Association of Litigation Funders (ALF) in the UK, Vannin recognises that Lord Keen’s response to the question of regulation is cautious and that must be correct.
Despite the leaps and bounds it has made in recent years in both availability and sophistication, third party funding is a new industry in the eyes of the government and for much of the judiciary.
The UK has one of the finest legal systems in the world - its primary function is the dispensation of justice. The UK has long recognised that meritorious claims should not be denied access to justice for lack of funds. Equally important though is that investors should not be allowed to play fast and loose with speculative claims that might hinder the primary function of the judiciary.
As we have said before, disputes funders who obligate themselves to act with professionalism will drive the evolution of third party funding in years to come. As only one of seven members of ALF, Vannin is committed to abiding by The Code of Conduct for Litigation Funders published in November 2011 (and amended in November 2016), which was issued by ALF, the independent body charged by the Ministry of Justice (through the Civil Justice Council) with delivering self-regulation of litigation funding in England and Wales. Key aspects of the Code include capital adequacy of funders, termination and approval of settlements, and control.
Statutory regulation will remain unnecessary only to the extent that professional third party funders like Vannin conducting proper due diligence of claims continue to prevail against ad-hoc funders seeking fast returns on speculative claims.