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Litigation Funding – More Choice Needed For Claimants

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September’s annual report from litigation funding business LCM has highlighted the overall lack of choice and competition in the UK’s litigation funding market. The report from the Australian based funder also highlights that the market for claimants seeking to fund litigation as a pro-active choice, rather than through financial necessity, is “almost entirely unaddressed”.

According to LCM, most competition for litigation funding in the UK has been focussed on individual, one-off claims in specific market sectors where a business or individual litigant has no option other than to finance their claims this way. Whilst the UK litigation funding market shown steady growth over the past few years, market analysis suggests that only approximately 3-7% of cases were funded by significant litigation financiers.

Commenting in the report, LCM CEO Patrick Moloney said that this pattern of funding was a result of there being only a small number of funders with the necessary “experience and capability in complex claims” to handle larger portfolio’s of cases, while “the addressable market is so large that competition is largely irrelevant at this stage of the market’s development”. Commenting further on the growth opportunity this gap in the market presents, Moloney said:

LCM is observing an early, but encouraging, change in attitude from corporates globally as they recognise the value of using an external source of capital rather than shareholders’ funds.”

In the previous financial year, LCM has processed around fifteen applications for corporate portfolio funding, with two actually being accepted. Overall, LCM currently has 29 projects under management with nearly 70 other portfolio’s also being considered.

Insolvency Claims Funding

Moloney also added that I addition to its corporate portfolio work, LCM will also become more active in the funding of “small-case insolvency” claims:

We see these as market sectors with strong growth potential and attractive financial metrics, and we expect the relationships we form through our presence in the small-case insolvency space will also lead to referrals for large claims, supplementing our share of more traditional parts of the litigation market.”

Talk To Us About Funding Litigation

If you are thinking about taking legal action against another individual or company but are confused about your funding options, Advantage Litigation Services are well placed to help. We can help you find the most cost effective solution for your circumstances. Click here to contact us today or call 0800 160 1298 to see how we can help you

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