Sorry for another Times story reference, but I felt myself slipping into bewilderment with this story. Third party financing for bringing a case, OK. But it is then denied that there is any resemblance to encouraging personal litigation because:
Helping one company to sue another and possibly profiting from it is simply not the same thing as helping the victim of a car accident to sue the driver at fault. One is a personal dispute that may have involved tangible human suffering; the other involves a business managing commercial risk.
Eh? Colour me stupid but what, precisely, is the difference? “I fund you to bring a case and take a cut of your winnings” is strictly disallowed in personal claims, but should be allowed in business claims because…? Apparently it is ‘simply not the same thing’, although both (hopefully) end in damages.
The rest of the article attempts a comparison with ‘forward contract’ arrangements, which strikes me as simply bollocks. Third party funding is not about minimising risk – because not taking legal action in the first place is about minimising risk.
Let us be honest – third party funding is exactly like ‘no win no fee’, it is about assessment of risk and according returns on investment. The only difference is that third party funding takes its rewards from the winner, where a CFA takes it from the loser. Frankly this article smells of special pleading and obfuscation. But what do I know, I’m not a commercial lawyer. I’m sure commercial lawyers will love third party funding.