Law Society Gazette roundtable on litigation funding
13th March 2017
Marvin Simons, Head of our Dispute Resolution Teams, was featured in the Law Society Gazette's latest roundtable, which discussed the impact funding is having on litigation and where it is heading.
Marvin, commenting on the impact that the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) is having on the balance of power in litigation, said:
‘I think it has tipped the balance of litigation away from the claimant to the defendant in many cases. We act for both, although we’re probably more claimant than defendant, but in the old days, the worst thing you got as a defendant was notice of funding. That was terrible news; but as claimants you don’t serve those any more – though you almost feel as though you want to serve one anyway.
‘So that’s gone and now, instead of the pressure being on the defendant, the pressure is actually coming back on to the claimant.’
Marvin also discusses the difference LASPO has made in relation to small to medium-sized claims, and whether or not to involve funders. He says: ‘Pre-LASPO, usually if you had a case for £1m, or even half a million or indeed £2m, if it was a really strong case then your best advice to the client would be to use a CFA. That way the client would get all their money back and you would get the success fee back. So it was rare that you would have a case where you could even justify thinking about [using funding].
‘But that has completely turned on its head now. You end up saying to clients, “you don’t actually want a CFA, because that means you’re going to pay me more. If you win the case, you’ve still got to pay me another 100% or 50% [of costs], whatever it is, and how does that help you?” So the client isn’t any better off…
‘Funding then becomes a much more attractive option and some of the funders are now looking at the market for smaller claims. For example we have what they call “early funding” for a client with a shareholder dispute that is worth about £2m. So it’s not a very big claim in those terms, but it’s a situation where the client doesn’t want to spend money, [and] he’s prepared to pay the funder a fair amount to get the clout behind him so he can proceed with the claim.’
He adds that for claims of this size, funding is ‘expanding it to a whole area of litigation that just wasn’t feasible before’.
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