There is no doubt that litigation funding is beginning to revolutionise the litigation market but has still a long journey to make before there is anything like equality of arms between a wealthy litigant and a party with more limited means. There are obvious problems which may be difficult to overcome such as funding a defence or where the remedy is not primarily monetary. The other issue is the take by funders from the potential damages. Funders are right to point out that 50% of something is better than 100% of nothing but that argument should not be an excuse for greed or uncompetitive behaviour. It will be the case that the more competition there is in the market the more prices will come down but funders must be more prepared to think laterally, such as mixing no recourse funding with straight lending and taking equity.
It is such a shame that successive governments decimated civil legal aid. My company, Unity Legal Solutions is working on a report which will show how cost effective civil legal aid was in giving access to justice. However, it became an easy target at a time when there was public disquiet not about civil legal aid but the perception of criminal law silks getting rich on the back of legal aid given to apparently undeserving criminals. It may be some time before there is any return to state aid to litigants but the private sector must find ways of filling in the gap.
I note the initiative taken by Debenhams Ottaway to create of panel of funders in an attempt to reduce commission paid to brokers. This ignores the fact that such commission is a small part of the overall cost including mark up on solicitors fees when fees are deferred, the take of the funders and ATE premiums. It also does not take into account the non chargeable work that solicitors adopting this model will have to undertake in getting a case across the funding line. Unity overcomes this problem by procuring initial advice as to the merits of a case, putting together the right legal team for the case, negotiating the fees and the funding in return for remuneration which is payable directly by the client and consisting partly of upfront fees and commission on success.