As a result of Lord Justice Jackson’s comprehensive review of civil litigation costs in 2010, the voluntary code of conduct for Third Party Funding was launched in November 2011, alongside the Association of Litigation Funders of England and Wales (ALF).
While the Code of Conduct is a voluntary one, it is intended to give solicitors confidence when selecting funders and, for those wishing to join ALF, compliance will be mandatory.
APPLYING FOR MEMBERSHIP OF THE ASSOCIATION OF LITIGATION FUNDERS OF ENGLAND & WALES
Since November 2011, the Association of Litigation Funders of England & Wales has been working on finalising their rules and the board is now inviting applications for membership.
In addition to being open to funders who satisfy the eligibility requirements set out in the articles of association, membership is also open to any person or entity that has an interest in litigation funding in their capacity as a litigation broker, costs / adverse costs insurer, law firm, barrister, academic etc. Membership is subject to approval by the directors and a membership fee and annual subscription is payable.
To qualify for funder membership, the applicant must be a funder within the meaning of article 2 of the Code. Furthermore, all funders wishing to join ALF must adhere to the following rules when entering into funding deals:
Take reasonable steps to ensure the litigant receives independent advice on the terms of the litigation funding agreement (LFA), which can be from the solicitor instructed in the dispute;
Not take any steps that may cause the litigant’s solicitor or barrister to breach their professional duties;
Not seek to influence the solicitor or barrister instructed in the dispute to cede control to the funder;
Ensure the funding agreement sets out the extent to which a funder may provide input into settlement discussions;
Only terminate its agreement if it reasonably ceases to be satisfied about the merits of a dispute; reasonably believes that the dispute is no longer commercially viable; or reasonably believes there has been a material breach of the agreement by the litigant; and
If there is a dispute between the funder and litigant about a settlement or termination of the agreement, a binding opinion will be obtained from a QC jointly instructed or nominated by the chair of the Bar Council
Funders must also maintain adequate financial resources to meet their funding obligations for at least 36 months.
For a solicitor debating which potential funders they should approach, it is certainly worth considering whether or not they have signed up to ALF.
Consequently, so long as a funder is adhering to the Code, whether or not they are a member of ALF is not necessarily determinative of their credibility as a provider of Third Party Funding.
If you have any questions about Third Party Funding or are unsure of which funder to work with, it pays to speak to a specialist broker with in-depth knowledge of the litigation funding market. A specialist broker at TheJudge will be happy to discuss your case requirements and recommend the best solution from our panel of trusted and well respected litigation funders. Contact us today on 0845 257 6058