The UK’s justice system has in the past been criticised for putting cost barriers in the way of those who may have a valid claim but insufficient funds to pursue it. Litigation funding was introduced as a financial model to deliver tailored financial solutions for plaintiffs, allowing them to pursue their case and seek appropriate redress through the courts.
Why Litigation Funding Is Necessary
Individuals and businesses alike often wish to start a court case to seek a remedy to injustice but in many instances cannot afford the costs of hiring legal representation, taking time off work, travelling to court and potentially losing their case and becoming liable for the other party’s costs. These costs can rapidly escalate in a complex case, effectively dissuading many valid claimants from pursuing a case, particularly when their opponent is considerably better resourced.
How Does Litigation Funding Work?
Companies such as Novo Modo offer litigation funding to individuals and corporations by way of levelling the playing field and giving these plaintiffs the opportunity to have their case heard. It covers the costs of legal fees and other expenses and is repaid as a proportion of the resulting settlement.
Are There Downsides to Litigation Funding?
Critics suggest that litigation funding encourages spurious claims which pose an unacceptable burden to the UK’s legal system, while others recognise that only 3-5% of potential cases are funded by litigation funders, suggesting that this is not a drastic problem.
What Types of Cases Are Suitable for Litigation Funding?
The majority of cases funded in recent years by litigation funding are class actions, commercial disputes and personal injury cases which would otherwise have been abandoned by plaintiffs based on affordability.
For the people who were successful in their legal endeavours, there is no doubt that litigation funding improved their access to justice, helping them to secure equal and fair treatment in the justice system as they pursued their cases. Litigation funding is not suitable for every plaintiff and every situation, but it can open doors that otherwise would remain firmly shut due to financial barriers.
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