The acceptance and mainstreaming of litigation funding are happening at different times and speeds in different parts of the world. Much of Europe has made use of the practice for nearly two decades. Other locales, like Singapore and Hong Kong, have only welcomed legal funding in recent years.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
The acceptance and mainstreaming of litigation funding are happening at different times and speeds in different parts of the world. Much of Europe has made use of the practice for nearly two decades. Other locales, like Singapore and Hong Kong, have only welcomed legal funding in recent years.
Omni Bridgeway explores how a jurisdiction that is new to litigation funding can take its cues from those who have had more time to refine their procedures and requirements. In common law jurisdictions like those in Australia, moving away from antiquated concepts like champerty was an important first step. As the practice of third-party funding grew in popularity and scope, Australia took steps to add legitimacy to the industry. First was a review by Lord Justice Jackson, which served as a precursor to new regulations and legislation surrounding the practice—as well as the formation of the Association of Litigation Funders.
In Singapore, emphasis is not on the courts to clarify the roles and duties of funders, but on legislation abolishing champerty while facilitating the funding of cross-jurisdictional and multi-jurisdictional cases. Case law is also used to inform the development of legislation and policy regarding funding—particularly funding of actions other than those expressly permitted.
While some countries like Australia are allowing courts greater control over approval of legal funding agreements—Singapore case law establishes that a funding agreement is not an abuse of process and that these agreements will only be found unacceptable under extreme circumstances. Meanwhile, UK governments are still loathe to formally regulate litigation funding.
Looking ahead, it’s clear that third-party legal funding will continue to grow and adapt to a changing world. Recognition of pending or possible litigation as an asset is commonplace in the UK. Defense-side financing is also gaining steam. It does appear that courts, funders, lawyers, and investors can all work toward the goal of increased access to justice and financial flexibility.
