Third party litigation throws off its criminal past

Third-party litigation funding used to be a crime known as champerty, however, this has developed into a £500m backed investment industry. It is now an ideal choice for the cash-ready investor looking for a lucrative courtroom opportunity.

Modern business jargon and the obscure Anglo-Norman legal term both describe this process as a way claimants can pursue their court case for a large amount of damages. Harbour Litigation Funding, the UK market leader, has this month announced it has tripled the available finances to £180m. As London has drawn in disputes from Russia and the Middle East, the fact that it has become a global legal centre has increased investment possibilities.

Ken Clarke, the justice secretary has this month been to Russia promoting the availability to international clients of the UK’s legal services. Meanwhile, legal expenses have risen in cost so much that those wishing to claim have been forced to find other ways to cut costs. They have found that they can reduce liabilities by using a third-party funder and taking a reduced award.

Harbour Litigation Funding invests more than £3m in commercial claims. Head of their litigation funding, Susan Dunn, claims that in the ten years she has been in the business the trend has risen. She claims that law firms have to look at other methods to pay fund their bills. Only the larger businesses are able to bring cases, smaller firms simply cannot afford it.

Ms Dunn went on to say that although the company focus is on litigation and arbitration in the UK, they also work with other countries, including the US and New Zealand. Harbour Litigation Funding is the third largest in the UK and is looking to invest. It is possible that there is about £500m put aside in the UK to pay for litigation.