Why do lawyers get so emotional over litigation funding when they themselves use contingent based retainers, asks Nick Rowles-Davies of Vannin Capital.
Clandestine. A dark art. Not quite right. These are just some of the ways I heard litigation funding described whilst attending the recent IBA Conference in Boston.
The conference brought together some 6,000 delegates, and a flurry of ideas and countless swapped business cards (at parties hastily relocated from government buildings due to the Federal shutdown). The level of conversation, activity and networking at the event was healthy, and opinions debated and exchanged an encouraging sign for the positive direction of the legal profession worldwide.
Unsurprisingly, in the litigation and arbitration sessions I observed, litigation funding featured as a hot topic. Sometimes it was beyond a top agenda item, often serving as the elephant in the room.
One thing remained very clear to me - funding continues to divide opinion.This is probably even more so since the high-level media coverage the collapse of the Excalibur case received, both in the US and UK, with both the FT and Wall Street Journal quoting eminent professionals with a view that serving as a wake-up call, or even a lesson, for funders.
On the evidence at the IBA, lawyers feel it is certainly much more commonplace than it was two or three years ago and it is becoming understood as a useful tool, whether liked or not.But, as detailed above, the criticism was also evident.
Lacking transparency, it is needed but not necessarily liked by everyone.
One lawyer present in one session I attended suggested that whilst funding was needed and had a part to play in the modern litigator or arbitrator’s armoury, there was just something about it that was “not quite right”. He couldn’t quite say why that was, bit insisted that there was something wrong with investing in people’s misfortune.
This appears to be crux of the matter for a number of lawyers – they want it to be available for cases, but at the same time, they don’t want to admit to using or needing it.
Sentiment gets in the way of facts
Given that litigators deal in presenting facts, it feels out of place that sentiment is allowed to get in the way when it comes to funding.In response, the arguments presented by funders are well versed, but certainly still true. It levels the playing field. It means that meritorious claims, which cannot be brought for lack of funds, are pursued.
In my last blog I suggested that in my view, there was no increase in the number of professional negligence claims brought as a result of funding. I was criticized in some quarters for not providing evidence to support this, yet those who made those comments, provided no evidence to the contrary.
That said, if there is an increase in negligence claims which has been brought about by the use of TPLF, then given there is no sense whatsoever in a funder funding a case without merit, then they are likely to be good and valid claims where a wrong is being put right, or at least there is an attempt to.
Lawyers and funders in the same game
Lawyers and funders are both in the business of funding litigation, whether by the use of funding or the use of contingent based retainers.Do the same criticisms that are levelled at funders apply to lawyers who will work at risk, on a contingent or conditional basis? Are they to be tarred with the funders’ brush? What is the difference between lawyers working on a DBA, or taking a conditional fee and litigation funding as regards ‘investing in people’s misfortune’?
Without funding or lawyers working at risk, how else will these claims be brought? Whilst critics would be happy if they were not brought, that is not access to justice. One over-arching and positive feeling from Boston regarding funding, using as many words as the “not quite right” phrase, was this: Here to stay.
Funding continues to grow and continues to divide opinion, but one thing all lawyers seem to agree on is that it is now a permanent part of the litigation framework.
NIck Rowles-Davies is a consultant to litigation funder Vannin Capital.