Third-party funders – access to justice warriors?

Deadman: funders conflating the by-product of their business with the purpose

Posted by Chris Deadman, director of operations at Litigation Futures Associate Invicta Capital Funding

Comments on UNISON’s landmark victory against the government in respect of employment tribunal fees got me thinking about the whole ‘access to justice’ argument and the role that third-party funders play.

I have sat in lots of meetings over the years where funders, some even with a straight face, claim that access to justice is a cornerstone of their business.

That is a statement of almost North Korean bogusness akin to saying that the Premier League exists solely to provide the public with 90 minutes of entertainment every Saturday afternoon. Or that Waitrose is only in business to introduce goji berries to upper-middle-class families from the Home Counties.

Funders who trot out the access to justice argument are guilty of conflating the by-product of their business with the purpose. I could be completely wrong here, but I am unware of any commercial funder in the UK which enjoys charitable status.

I haven’t sat in any pubs recently where I’ve been guilt tripped into buying a red rose for a starving commercial claimant.

You do not require the cognitive powers of Alan Turing to deduce that third-party funders exist for another purpose – making money for themselves and their shareholders. And there is absolutely nothing wrong with that.

Sure there must be clear ethical constraints, but the provision of finance for legitimate commercial litigation should not give us cause for self-flagellation.

We exist to make a profit in exactly the same way as a lawyer who profits from the upside of a conditional fee agreement. Claimants and lawyers alike who complain about aggressive commercial terms need to remember that our finance in non-recourse, i.e. they do not have to pay it back in the event that their case fails. And in any event, the market will punish the more egregious examples anyway.

So my plea to the litigation finance industry is to dispense with whole Barnum & Bailey hokum about access to justice and admit that we exist to make a profit first and provide a civic service second.


    Readers Comments

  • Disagree. You assume it is either/or. That is not the case. Industry serves civil and commercial justice at same time, and nothing wrong with that even if motivated by profit

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