A hands-off approach serves the litigation funding market well, says Angus Nurse
The emerging market in litigation funding, while providing access to justice for small and medium enterprises (SMEs), does little for ordinary consumers unable to afford their own litigation costs. However, in their research report Litigation Funding: Status and Issues, researchers from Oxford and Lincoln Universities concluded that concerns over maintenance and champerty with the involvement of third parties are unfounded. In practice, funders have no interest in controlling litigation and their “due diligence” approach means that only cases with a clear legal strategy in place are likely to be funded.
Third party issues
Concerns about third party funding reflect both historical concerns about maintenance and champerty and the realities of the US and Australian markets, where third party funders control class actions. Champerty reflected fears that frivolous or otherwise unmerited litigation would be taken solely for profit, while maintenance addressed concerns that an unconnected third party might control another’s litigation. The Criminal Law Act 1967 abolished both the offences and torts of maintenance and champerty, but expressly preserved the invalidity of champertous
