Happy Friday! Good news this week for litigation funders in the United Kingdom:
The UK’s Ministry of Justice announced that it will introduce legislation to reverse a UK Supreme Court ruling on litigation finance and clarify that litigation funding agreements are not damages-based agreements.
In the 2023 ruling, which involved a class action against the truck manufacturer PACCAR, the Supreme Court determined that litigation funding arrangements where a funder receives a percentage of the damages awarded in the underlying claim constitute damages-based agreements. This made many litigation funding agreements unenforceable.
The ruling caused trouble for funders in the UK, many of whom were forced to redo contracts with their clients. Over the summer, a UK court advisory panel, the Civil Justice Council, recommended the ruling be reversed through legislation.
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Though there’s no timeline for the legislation, it’s welcome news to funders backing cases across the pond.
What I’m Reading
- Lindsay Lewis and Phil Goldberg of the Progressive Policy Institute wrote an opinion piece in The Hill raising alarms about foreign actors funding US lawsuits. They advocate for transparency when funders are involved in a case and whether the funder controls the litigation.
- Litigation funder Omni Bridgeway announced it’s expanding its US team with two hires. Claire-Naïla Damamme, who has led Omni Bridgeway’s international arbitration initiative for nearly a decade, and William Vigen, who was previously an antitrust partner at Venable, are now investment managers and legal counsel in the firm’s Washington office.
- The editorial team of Risk & Insurance is calling for legislative reform and transparency of the litigation finance industry. They argue that litigation funders are exploiting the civil justice system, contributing to increasing insurance costs.
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