The Financial Times published an article last week, ‘Burford case puts litigation funding in the spotlight’, in which it examined the recently increased popularity of litigation funding. This is a practice whereby companies such as Burford Capital invest in legal proceedings and if the case is successful, take a share of the proceeds. The article partially attributes this rise to investors seeking higher returns in the wake of the financial crisis.
The litigation finance debate asks whether this new trend is helpful for claimants otherwise unable to fund costly litigation, or whether the lack of regulation, uncertainty for investors and exploitative nature is more problematic. Jonathan Fisher QC, when asked for his opinion on the matter, highlighted the inevitability of the practice in the current climate. He said
“litigation funding has flourished in recent years in part because legal aid has been withdrawn and the cost of litigation is very great.”