The CJC has finally released its litigation funding review, after it was shelved due to the UK general election. The review of litigation funding has been keenly awaited, and the 150-page report includes a wealth of recommendations. A key focus area for the report is litigation funding agreements and their regulation.

The background

The review was carried out in response to the ongoing debate about whether or not litigation funding is a form of third-party damages-based agreement. This means that its validity is in question. The government planned to introduce legislation as a response, confirming that litigation funding agreements are not DBAs. However, the legislation fell by the wayside, and the industry was left in a state of limbo.

The new report tackles -this and other key issues, including a new regulatory consumer duty, court approval of funding agreements, and independent legal advice for parties seeking litigation funding. These measures will be welcomed by litigation funding providers such as //www.novo-modo.co.uk/litigation-funding who currently operate within these standards.

Other measures in the report

The CJC also recommended that the cost of funding should sometimes be recoverable, and covered the topic of cost security, with implications for the ways in which litigation funding operators should be run and structured. The review also stressed how important it is for claimants to access justice and noted that litigation funding is typically the best and most viable option for many claimants to do this. It included various technical and regulatory recommendations to help structure the industry to best effect and ensure that funding providers and claimants are set up as effectively as possible.

Greater certainty for the industry

The welcome and long-overdue report will provide valuable certainty and clarity for litigation funding providers, legal bodies, and potential claimants, allowing the industry to continue to operate with new refinements and adjustments for even better outcomes. In this way, its provisions are welcome for everyone involved in the justice system and ensure that government legislation will update to reflect the needs of the market and the ever-evolving legal system.