Originally from Handbook on Third-Party Funding in International Arbitration, Second Edition

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PART I.  THE THIRD-PARTY FUNDING LANDSCAPE

1.   The TPF market in England and Wales

1.1.  Please shortly describe the TPF market in your Jurisdiction.

TPF has been regarded as an accepted and mature means of financing litigation in England and Wales. The jurisdiction has become a leading centre for the TPF industry, which is likely to be the case because of the jurisdiction’s leading position as a centre for dispute resolution. The data suggests that its use continues to grow.

By way of illustration, in 2018, a survey by the funding firm Burford of private practice and in-house lawyers reported that 63% of UK respondents stated that their use of legal finance increased between 2016 and 2018.  It seems that participants in the UK may be more open to TPF than participants elsewhere. Thus, compared to other jurisdictions, the same survey found that United Kingdom respondents are most likely to agree that TPF can help turn in-house legal departments into profit centers.

It is likely that the use of TPF has increased since the 2018 Burford survey. Indeed, in June 2022, it was reported that UK litigation funders’ assets hit GBP 2.2 billion in 2021, which is an increase of 11% from 2020. This implies that there has been more than a tenfold increase in the value of funders’ assets over the last decade (from GBP 198 million recorded in 2011/2012).  Admittedly, this does not show to what extent funders have been able to find cases in which to invest, or how far this remains ‘dry powder’.