Study Finds Litigation Funding Supports Public Interest and Access to Justice

The Legal Services Board (LSB) has released a groundbreaking report on litigation funding, highlighting its importance in supporting access to justice while also acknowledging potential risks associated with economic crime. The report, conducted by Professor Rachael Mulheron of Queen Mary University in London, identified 44 consumer cases involving litigation funding between 2019 and 2024.

Litigation funding, which allows cases to be funded that would otherwise not be possible, was found to serve the public interest and improve access to justice. However, the report also noted that the ultimate outcome for funded clients may not always be favorable, with some receiving smaller than expected compensation.

The report also touched on the potential risks of litigation funding being used for economic crime, particularly by foreign funders who are not members of the Association of Litigation Funders. While there have been no allegations of unlawful funding practices in England, the report emphasized the importance of anti-money laundering checks on funders.

Despite these risks, the report concluded that litigation funding plays a vital role in the legal profession by ensuring lawyers are paid and raising awareness of individuals’ rights. If the Litigation Funding Agreements (Enforceability) Bill 2024 is passed, litigation funding is expected to further develop as a niche but important aspect of legal services provision.

Richard Orpin, interim LSB chief executive, emphasized that while litigation funding is crucial, it alone cannot address the significant access to justice gap. The findings of the report will inform the LSB’s work on enhancing access to justice and will be shared with policy makers and the Civil Justice Council for further consideration.

Overall, the report sheds light on the complex landscape of litigation funding, highlighting its benefits and challenges in supporting consumers and access to justice.