Funds For Feuds - Recent Challenge To Landmark Litigation Funding Decision

The Royal Court of Jersey has handed down its judgment in the most recent hearing of the proceedings brought by Barclays Wealth Trustees (Jersey) Limited and Barclays Wealth Fund Managers (Jersey) Limited as trustee and manager of the R2R Funds against the former trustee and manager, Equity Trust (Jersey) Limited and Equity Trust Services Limited. The significance of this judgment is that this was the first challenge to a litigation funding arrangement. The earlier landmark decision reached In the Matter of the Valetta Trust [2011] JRC 227, on the validity of third party litigation funding arose out of a Beddoe application and was therefore uncontested. The most recent judgment reinforced the earlier decision, namely that a properly structured litigation funding agreement will not infringe the laws against champerty and maintenance and will not be contrary to the Code of 1771. Prior to the Valetta Trust case, whilst it had long been recognised by Third Party Litigation funders based in the United Kingdom that the Channel Islands have a well established litigation market, there had been no established domestic market for funding. Moreover, until the decision of the Royal Court in the Valetta case, the legality and enforceability of funding agreements in Jersey remained untested, unlike in the United Kingdom and elsewhere. However...