There is no doubt that litigation funding, or rather, dispute resolution funding as it really should be known given the breadth of the disputes which are now being funded, is growing. As one of only seven members of the Association of Litigation Funders (ALF), Vannin Capital has seen an exponential increase in requests for funding year on year since its inception.
However, many lawyers still have preconceived ideas about the risks of obtaining funding. The introduction of ALF’s Code of Conduct, which was updated this year, addresses and resolves many of these perceived risks.
In summary, in upholding the ALF Code of Conduct, Vannin Capital, and the other members of ALF, must comply (inter alia) with the following obligations:A) Capital Adequacy
At all times, Vannin must have access to adequate financial resources to meet its obligations. In particular, Vannin must ensure that it has capacity to:
- pay all debts when they become due and payable; and
- cover aggregate funding liabilities under our funding agreements for a minimum period of 36 months.
Of note, at its inception, ALF had in excess of 20 prospective members. Among other things, the introduction of the Code of Conduct’s capital adequacy requirements has reduced this to seven current members, underlining the high financial threshold ALF members must meet to maintain their membership.
Furthermore, as an ALF member, Vannin must accept a continuous disclosure obligation in respect of its capital adequacy. Vannin also undertakes to be audited annually by a recognised national or international audit firm and has agreed to provide ALF with the resulting audit opinion.B) Confidentiality
It goes without saying that the ALF Code of Conduct requires Vannin to observe the confidentiality of all information and documentation shared with it.C) Control
Vannin must not seek to influence a funded party’s solicitor or barrister to cede control or conduct of a dispute to it.
In complying with this obligation, Vannin is clear, it does not want to interfere with the conduct of any dispute it is funding. Once funded, Vannin will leave the solicitors and barristers instructed to run the case as they think best.D) Reasonable behaviour
The Code of Conduct requires Vannin to behave reasonably. In the unlikely event that there is a dispute between Vannin and a funded party, a binding opinion must be obtained from an independent QC to resolve the dispute.
Litigation funding offers claimants obvious benefits, enabling meritorious claimants that may otherwise not have brought a claim due to, for example, a lack of funds, perceived risks of litigation, budgetary constraints, internal policies or a need, or desire, to deploy money in other parts of their business, to advance their claims.
The benefits of litigation funding coupled with the security provided by the ALF Code of Conduct makes consideration of funding every time a potential claimant has a meritorious claim an obvious and sensible choice.
For more information on Vannin Capital, please contact: Leanne Harker, Marketing at Vannin Capital, T: +44 (0)1624 615 111, E: firstname.lastname@example.org