In terms of the popularity of litigation funding in recent years, it has become ever-increasingly present as a feature when it comes to commercial dispute resolution across the world. Generally speaking, it has been Australia which is the place that has long been at the very forefront of legal and commercial developments in this respect when it comes to litigation. However, in the last few years, the litigation funding sector in the UK has been growing considerably. In fact, it has been growing at a rapid pace. But exactly how much is this industry now worth in the country?
Litigation Finance industry in the UK
As previously mentioned, the litigation funding market has been booming. For example, it has been reported that funders’ investments in UK litigation had risen dramatically. It has increased by over 25% since 2016, moving from £575 million to over £723 million in the next year. It has continued to increase each year. In fact, according to the professional services firm RPC, headquartered in London, the assets of the UK’s top 20 largest independent litigation funders now had an estimated worth of £1.03 billion.
Why is the litigation finance industry growing?
There are a number of reasons attributing to the rise in the litigiation finance industry’s worth. For example, the UK courts have been increasingly accepting over funding arrangements as a means of promoting access to justice. This in part has been as a result of an endoresement that was given by Lord Justice Jackson in his review of civil litigation cots.
Another factor leading to the prolific rise in the industry’s worth is due to the increase in the involvement of litigation firms involvement in funding offshore claims. Furthermore, funding international arbitration cases (for example, investor-state dispute settlement claims) has also helped to help the sector to grow.
In addition, more money is contuining to be invested into the aset class, with litigation funders in the UK increasing their search for cases to back, as a way of deploying the capital. For example, a particular area of focus has been group actions.
The future of the litigation finance industry
What next for the litigation finance sector? It is in these firms interest to deliver a meaningful deployment of funds, as well as provide good risk-weighted returns too. As a result, there will need to be a focus on proper due diligence, as well as balancing the investment of funds. Litigation companies are increasingly looking at spreading their search into other areas of the market that are usually neglected. There is also a keen interest in finding more innovative origination strategies too such as securing