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A recent guest post explored the reasons for growth in litigation funding in Germany.
article entitled “The Future of Litigation Funding” (here), Burford Capital CEO Chris Bogart suggests several things that we can expect from litigation funding in the future.
Since 2012, leading litigation financing firm Burford Capital has sponsored an annual survey of companies and law firms in the U. Over half of the lawyer respondents in each of the three countries who have not yet used litigation finance expect to do so within two years.
The survey showed that the top three reasons companies and firms use litigation finance are: 1.
All of these observations seem plausible to me, but in contemplating these possibilities, I think is important to keep the larger picture in mind.
The changes that the availability and use of third-party litigation are bringing about have consequences.
To pursue claims that will bring value to the business; 2.
To bring or sustain proceedings regardless of cash position; and 3. The survey obviously focused on the countries that, along with Canada, are the ones in which litigation funding is most well-established.
What I have suggested here might happen in the future is pretty much what has already happened in Australia and Canada.
As Frankel discusses, there currently is no collective action mechanism in the Royal Court of Jersey (which oversees cases involving business incorporated in the Channel Islands offshore jurisdiction).
However, New York-bases law firm Kobre & Kim “has plans to team up with the litigation funder Bentham IMF to replicate the advantages of a class action in a jurisdiction where mass litigation doesn’t exist.” The Jersey collective action, if brought, would involve alleged overbilling by an intellectual property management company.
For example, the growth in litigation funding may mean an increase in the amount and seriousness of litigation, particularly in countries that may not have a significant prior record of litigation.
Alison Frankel’s September 14, 2017 post on her blog entitled “Law Firm Wants to Bring Bentham-Funded ‘Class Action’ in Channel Islands” (here) provides an interesting glimpse into how this might work.
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As litigation funding becomes increasingly prevalent, and in particular, as questions about litigation funding continue to arise, calls for regulation and disclosure are likely to continue.