It’s been over 20 years since a law was passed allowing litigation funding. While many are still ambivalent about this form of funding, citing recent industry scandals and anxieties about becoming a more litigious society, each year thousands of claimants secure compensation for their losses, thanks largely to this route.
So how did litigation funding come to be such a part of everyday law?
Talk to any claimant in the 1980s and they will speak in dark tones about how difficult getting representation for certain cases used to be.
It was a different time. Just getting an audience with law firms was no simple matter, if you didn’t have the right sort of connections or social background. Wigs were routinely worn for non-criminal trials and the law didn’t feel accessible for most people, certainly not an environment in which you might bring an action against your superiors.
If getting your case started was difficult, then finding the money to pursue it was near impossible. Whilst the value of damages awarded was rising, so were the costs of seeking redress. Many litigants needed to find multi-millions of pounds to be able to take a case anywhere.
Over in the US, though, capital was easier to source and here a growth in litigation through the 80s and 90s saw an increase in civil cases, which could and did, win funding. In the UK, however, a number of essentially medieval laws meant your chances pre 2000 of obtaining finance were remote.
At the core of English law are prohibitions on someone who doesn’t have a direct interest in your case from supporting it. The terms for this are champerty, livery and maintenance, and they all stem from a feudal law aimed at preserving the purity of a case.
In its medieval conception, you were prohibited from giving your feudal lord a proportion of your land’s produce in return for him arguing your case. The premise wasn’t dissimilar, in the modern idiom, of ambulance chasing only applied to unscrupulous members of the nobility. That royal officials, for example could lend their names to bolster the credibility of fraudulent claims gain a share of the winnings, and that would destabilize the feudal society they lived in.
But when the 2009 Jackson reform of civil litigation advocated litigation funding, all that was largely consigned to the history books and a new era was brought in.