SIMON KUPER: Litigation funding gains ground as it benefits both claimant and funder
Businesses are employing a strategy of having proceedings bankrolled rather than risking funds for legal costs
Since the Supreme Court of Appeals judgment in 2004 in what is colloquially known as “the potato case”, businesses have been turning to litigation funders to assist them with funding legal proceedings. Litigation funding aligns the interests of a claimant (who wants a result as cost-effectively as possible), the interests of the legal representatives (who need to be remunerated regardless of the result), and the interests of funders (who want a fair return on their investment).
Traditionally, litigation funding has been seen as a way of ensuring that a lack of money is not the only hurdle to a business instituting a claim against another party for a breach of contract or other commercial disputes. This is because legal disputes tend to be complex, expensive, take several years to conclude, and are usually against well-resourced and well-represented defendants; success is not guaranteed, and many companies are unable to properly bankroll their claims. However, companies with m...
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