6 September 2012Print This Post

Jersey court gives green light to third-party funding

Jersey: funding not against Jersey law

The Royal Court of Jersey has endorsed the use of litigation funding on the island in a case funded by Harbour Litigation Funding.

It is the second case in which funding has been approved in Jersey, but the first where the issue was fully argued.

In Barclays Wealth Trustees (Jersey) Limited v Equity Trust (Jersey) Limited and Equity Trust Services Limited, Equity Trust tried to have the case struck out because of the funding agreement, but Master Wheeler did not accept that Jersey law prohibited such a contract as Equity had argued.

The judgment follows an earlier Royal Court judgment in another matter funded by Harbour which had endorsed litigation funding in Jersey (Re Valetta Trust in December 2011).

Master Wheeler referred with approval to the Valetta Trust case, where the Royal Court had concluded: “[Harbour’s funding agreement] cannot be said in any way to corrupt the purity of justice. On the contrary, it facilitates access by plaintiffs who would otherwise be unable to bring the proceedings because of a lack of resources.

“Importantly, the agreement provides that control of the proceedings will remain with the plaintiffs and their lawyers; the sole right of Harbour will be to be kept informed…. All in all, far from this agreement being contrary to the purity of justice, it fulfils the important role of facilitating access to justice without endangering the purity of that process.”

Master Wheeler added that had he been required to decide whether the agreement was champertous, he would have found that it was not.

Susan Dunn, Harbour’s head of litigation funding, said: “The Royal Court reached its conclusion having heard representations from both parties about funding and quite rightly, in our view, concluded that the fact a case benefits from litigation funding cannot be a basis for a defendant getting out of its potential liability. It would be an odd outcome indeed if defendants facing funded claimant with good claims were absolved on that basis alone.

Equity Trust was the former trustee and manager of real property unit trusts which ran into financial difficulty in 2007. The case is being brought by the successor trustee and manager, Barclays Wealth, over allegations of breach of trust and breach of fiduciary duty. Equity denies the allegations.

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