Third-party funding

A Civil Justice Council forum in February attended by representatives of the leading players in the costs industry considered the future of third-party funding. The consensus was that there should be regulation requiring funders to provide security for costs, as well as disclosure, to some extent, of the funding arrangement. It was also generally agreed that regulation could be achieved by extending the current claims management company regime to third-party funding. The Law Society’s Gazette and its publication Litigation Funding quoted Sir Anthony Clarke, the Master of the Rolls saying that he was in principle a supporter of third-party funding, provided that appropriate regulation is put in place. He observed: ‘The main purpose would be to develop sufficient safeguards to deter any rogue traders such as those that besieged the claims management companies before they were regulated’. He hoped that the proposal to reform the security for cost regime would be considered by the Rule Committee ‘in the not too distant future’. The two publications quoted Russell Wallman of the Law Society as saying: ‘An encouraging degree of consensus has emerged about the need to avoid the unnecessary regulation of third-party funders while ensuring that claimants are fully advised about the arrangements they are entering into. There is also broad agreement about the need to protect potential opponents against being unable to recover their costs. We think this consensus will provide a sound basis for consultation on the possible rules of court.’