It has been reported in the Law Society Gazette that the Association of Litigation Funders (‘ALF’) is planning to put in place a minimum capital adequacy provision of £2,000,000 for Funder Members.
A meeting of ALF members is due to take place in February and, as a Broker Member of the Association, TheJudge will no doubt soon receive more details on the proposed change and the rationale behind it.
At this point, we would speculate that the change is designed to prevent organisations who do not have genuine access to sufficient capital masquerading as litigation funding companies and being Funder Members of ALF. It is fair to say that there have been companies holding themselves out as litigation funders able to make decisions to fund cases when in fact they are intermediaries who do not have the necessary funds within their control.
Whether it was for this reason, or more simply to strengthen the credibility of ALF, we do not know. But, TheJudge certainly welcomes the development.
As the first Broker Member to join ALF, we believe it is vitally important that there is a healthy market for litigation funding to promote competition between providers to ensure the products can meet the needs of a wider class of litigants. It is crucial that those seeking to play the role of a funder or a broker do so in a clear and transparent fashion so lawyers and clients can engage with the litigation funding market with confidence.
If you would like to discuss a case in need of litigation funding, please contact us.