Third-party funding of civil cases is now firmly established in English law of civil procedure.
Legal Standing of Funding Agreements
Third-party funding agreements are considered to be lawful in principle by English courts. The fact that a funder is to make a profit from the success of the proceedings is not in itself champertous, as long as the funder does not intervene in an improper manner in the conduct of the proceedings.
Where Champerty Still Matters
However, agreements that grant the funder excessive control over issues and case strategy will be struck down. The key consideration will be whether the claimant retains genuine control and makes independent decisions with regard to the conduct of the litigation and the terms of any potential settlement.
Disclosure to the Court and Opponent
Parties funded by a third party are expected to disclose the existence of the funding arrangement as required by the civil court procedural rules, particularly on case management issues, to ensure that the correct order in relation to costs is made.
Funder Involvement and Interference
The key difference here between acceptable behaviour and interference is that the funder can be monitoring what is happening with the claimant’s case while the claimant is still in control and making decisions on matters such as settlement. This is in contrast to the funder instructing lawyers on behalf of the claimant or even vetoing offers into settlement on behalf of the claimant without the claimant’s consent.
If an Agreement Is Found Unenforceable
This means that even if your agreement is found to be unenforceable, it does not necessarily mean that your case will fail. Instead you could face an immediate cost situation. More on Litigation Funding London can be found at https://www.novo-modo.co.uk/litigation-funding-london.
The simple way to avoid any problems with your funding agreement in court is to get the agreement right from the outset.