Litigation Funding And Access To Justice

Statistics from the Ministry of Justice demonstrate that between 2005 and 2018, government expenditure on legal aid, corrected for inflation, fell from approximately £2.6 billion to approximately £1.6 billion.

In 2005, legal aid was a shadow of its past glories; its reach had already been removed from almost all aspects of civil litigation. The cuts since have destroyed the last bastions of civil legal aid. The reasons for government's long-held policy of reducing legal aid are clear. Whilst there is scope to dispute the oft-stated assertion that the UK has the highest legal aid budget in Europe, it is undeniable that legal aid is hugely expensive. The only person for whom £1.6 billion is not costly is the person currently footing a £2.6 billion bill.

However, cuts to legal aid impede access to justice, a basic and crucial element of the rule of law. For years, the Ministry of Justice has battled with how to maintain access to justice whilst delivering the policy to reduce, and continue reducing, the legal aid budget.

The CFA Regime

The nineties brought in conditional fee agreements. They became the keystone providing access to justice in large parts of our civil justice system, particularly the personal injury sector. By 2009, the Ministry of Justice concluded that the financial imbalances that the 'old' CFA regime had created necessitated a review. Amongst his other findings, Lord Justice Jackson concluded that the promotion of litigation funding was an answer to the restriction on access to justice that restricting the 'old' CFA regime and slashing legal aid created.

But is there any truth in Lord Jackson's conclusions? Has the subsequent promulgation of litigation funding promoted access to justice or not? Or will litigation funding have more to do with profits and less to do with access to justice, as one might argue of the CFA regime before it?

Litigation funding

From the outset, the economics of litigation funding discourage the suggestion that it truly increases access to justice. The first proponents of litigation funding were 'Davids' looking for help to topple their 'Goliaths', but they were nonetheless Davids with 7-figure claims.

Litigations funders are clearly aware of the dissonance between the economic realities of funded claims and benefit of funding's reputation for access to justice. Earlier this year, Therium announced the establishment of a £1 million fund to provide not-for-profit litigation funding to facilitate...