Ever since the publication of the Voss Report and its recommendations for increased regulation of litigation funding in the EU, there has been much debate about what the future of regulatory oversight should look like for this growing industry. In the absence of any updates on the advancement of the Voss Report’s proposal, critics of third-party funding are reigniting their calls for the EU to act and impose stricter regulations on funders operating in Europe.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Ever since the publication of the Voss Report and its recommendations for increased regulation of litigation funding in the EU, there has been much debate about what the future of regulatory oversight should look like for this growing industry. In the absence of any updates on the advancement of the Voss Report’s proposal, critics of third-party funding are reigniting their calls for the EU to act and impose stricter regulations on funders operating in Europe.
Writing in an op-ed for Funds Europe, former British MEP Mary Honeyball highlights the recent example of Therium’s funding of the case against the Government of Malaysia by the descendants of the Sultan of Sulu. Honeyball suggests that this case, and its $15 billion arbitral award, underscores the lack of transparency around litigation funding and goes so far as to suggest that “this case harnesses colonial divides for financial gain.”
Honeyball goes on to argue that this case, along with other similar activities by litigation funders, are examples of why the EU must move to strictly regulate litigation financing, suggesting that without such regulation, “this risks millions of European consumers becoming pawns in profit-seeking.” Honeyball rejects the idea that self-regulation is sufficient to act as guardrails to the litigation funding industry, and that the EU must not only enact transparency requirements, but use its legislative authority to set appropriate standards for the industry.
