The Growth of Commercial Litigation Funding

Key Points

• Litigation funding is a growth industry, but its capacity to grow is limited by the rule forbidding a third party from maintaining litigation unless it has a real or bona fide interest in the litigation.
• A recent decision suggests courts will adopt a liberal approach to determining what constitutes a real or bona fide interest.

The cost of litigation is a well recognised problem. The rule of law depends on a functioning and accessible judicial system, however, unless parties can afford the cost of using the courts, the system, no matter how good, will be in vain. As is often the case, while the experts consider ways in which justice can be delivered cost-effectively, the market has produced its own answer, called litigation funding.