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ENGLAND'S UNIQUE APPROACH TO THE SELF-REGULATION OF THIRD PARTY FUNDING: A CRITICAL ANALYSIS OF RECENT DEVELOPMENTS

Published online by Cambridge University Press:  02 December 2014

Rachael Mulheron
Rachael Mulheron*
Affiliation:
Professor of Law, School of Law, Queen Mary University of London.
*
Address for correspondence: Department of Law, Queen Mary University of London, Mile End Road, London E1 4NS. Email: [email protected].
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Abstract

Third Party Funding is governed by a unique and unparalleled legal framework in English law. That framework consists of: the recent 2014 Code of Conduct for Litigation Funders, its supervision by the Association of Litigation Funders, and sporadic judicial oversight of Litigation Funding Agreements – and with some unenacted legislation in the background for good measure. The purpose of this article is to analyse and critique this unique regulatory regime in several key respects. These include: the capital adequacy required of Funders; the key anti-champerty factors either judicially stipulated or contained within the 2014 Code; the efficacy and fairness of the so-called “Arkin cap”; the grounds upon which a Funder may legitimately withdraw funding; and the impact of recent contingency fee reforms. Overall, Third Party Funding represents an evolving and controversial landscape, both legally and politically.

Keywords

Third Party Fundinglitigation Fundersdamages-based agreementscontingency feeschamperty and maintenancetermination of contract
Type
Articles
Information
The Cambridge Law Journal , Volume 73 , Issue 3 , November 2014 , pp. 570 - 597
Copyright
Copyright © Cambridge Law Journal and Contributors 2014 

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References

1 In this article, Third Party Funding (also called Litigation Funding) means the funding of disputes by parties who have no pre-existing interest in, or connection with, the subject matter of the dispute, and where the Funder is engaged in the business of funding litigation in return for a share of the proceeds.

2 All references to “England” hereafter should be taken to mean a reference to “England and Wales”.

3 For membership, terms of reference, and the Code itself, see <http://www.judiciary.gov.uk/about-the-judiciary/advisory-bodies/cjc/third-party-funding>.

4 Review of Civil Litigation Costs: Final Report (December 2009) (“the Jackson Final Report”), with Third Party Funding discussed in ch. 11. See earlier Review of Civil Litigation Costs: Preliminary Report (June 2009) (“the Jackson Preliminary Report”), ch. 15.

5 The ALF's Rules of Association divide membership between Funder Members and Associate Members (per cll. 3.1 and 3.2). Funder Members are those persons or entities that satisfy the definition of “a Funder” in cl. 2 of the 2014 Code, whereas Associate Members covers persons or entities who “have an interest in litigation funding” in other capacities. The Membership Directory is available at <http://associationoflitigationfunders.com/membership-2/membership-directory/>.

6 According to Article 2(a) of the ALF's Articles of Association, available at http://associationoflitigationfunders.com>.

7 Available in full text at <http://associationoflitigationfunders.com/code-of-conduct/>.

8 I.e. every Funder agrees to be bound by this fully developed “complaints procedure” (cl. 15) “in respect of any relevant act or omission by the Funder, Funder's Subsidiary or Associated Entity”. This obligation supplements the existing “Q.C. clause”, which provides that “if there is any dispute between the Funder … and [the Litigant] about settlement or about termination of the LFA, a binding opinion shall be obtained from a Queen's Counsel who shall be instructed jointly or nominated by the Chairman of the Bar Council” (per cl. 13.2). The new complaints procedure is wider than the Q.C. clause, because any party may make a complaint (and not merely a party to a LFA) and about any aspect of Third Party Funding.

9 This article does not deal with the several practical aspects of Third Party Funding, but the author has discussed these elsewhere, e.g. Costs and Funding of Collective Actions: Realities and Possibilities (Research Paper for the European Consumers' Assn (BEUC), February 2011), ch. 16; and “Third Party Funding of Litigation: A Changing Landscape” (2008) 27 C.J.Q. 312 (co-authored with P. Cashman).

10 See e.g. Giles v Thompson [1994] 1 A.C. 142 (HL); Thai Trading Co. v Taylor [1998] Q.B. 781 (CA); Arkin v Borchard Lines Ltd. [2005] EWCA Civ 655 (“Arkin”); Hamilton Al Fayed (No. 2) [2003] Q.B. 1175 (CA).

11 [2004] EWCA Civ 292, at [54]. For similar comments, see e.g. Hill v Archbold [1968] 1 Q.B. 686 (CA), 697; Trendtex Trading Corp. v Credit Suisse [1980] 1 Q.B. 629 (CA), 663; R. (Factortame) Ltd. v Secretary of State for Transport (No. 8) [2003] Q.B. 381 (CA), at [31] (“Factortame”); Sibthorpe v Southwark LBC [2011] EWCA Civ 25, at [15]–[33].

12 Jackson Preliminary Report, ch. 15, at para. [1.1]. See also Jackson Final Report, ch. 11, with various justifications at para. [1.2].

13 CJC, Improved Access to Justice – The Future Funding of Litigation: Alternative Funding Structures (June 2007), recommendation #3, p. 12, and Ch. C, pp. 53–67; and earlier CJC, Improved Access to Justice – Funding Options and Proportionate Costs (August 2005), recommendation #13.

14 Note e.g. the realistic appraisal of Sir Rupert Jackson that Third Party Funding is “most readily obtained for high value cases with good prospects of success”: Jackson Final Report, ch. 11, at para. [1.5]. See also the discussion in Mulheron, R. and Cashman, P., “Third Party Funding of Litigation: A Changing Landscape” (2008) 27 C.J.Q. 312Google Scholar.

15 E.g. Barclays Wealth Trustees (Jersey) Ltd. v Equity Trust (Jersey) Ltd.) [2013] JRC 94. Also Re Valetta Trust [2011] JRC 227, at [32]–[36].

16 E.g. Bayens v Kinross Gold Corporation [2013] ONSC 4974, at [37], [41]; Dugal v Manulife Financial Corporation [2011] ONSC 1785; Trustees of the Labourers' Pension Fund of Central and Eastern Canada v Sino-Forest Corporation [2012] ONSC 2937. For discussion of the Canadian scene, see e.g. Koshal, A., “Third Party Funding for Class Actions: Problems and Solutions” (2013) 8 Canadian Class Action Review 223Google Scholar; Kalajdzic, J., Cashman, P., and Longmoore, A., “Justice for Profit: A Comparative Analysis of Australian, Canadian and US Third Party Litigation Funding” (2013) 61 Am.J.Comp.L. 93CrossRefGoogle Scholar.

17 E.g. Waterhouse v Contractors Bonding Ltd. [2013] NZSC 89, [2014] 1 N.Z.L.R. 91; Saunders v Haughton [2009] NZCA 610. For further thoughtful discussion, see, e.g. Morabito, V. and Waye, V., “Reining in Litigation Entrepreneurs: A New Zealand Proposal” [2011] N.Z.L.Rev. 323Google Scholar.

18 E.g. Campbells Cash and Carry Pty Ltd. v Fostif Pty Ltd. [2006] HCA 41 (with a 5:2 majority, re the validity of the LFA; however, the representative rule's “same interest” requirement was not met, said a different majority); Clairs Keeley (a firm) v Treacy [2004] WASCA 277. For detailed discussion of the Australian scene, see e.g. V. Morabito, An Empirical Study of Australia's Class Action Regimes: First Report (Class Action Facts and Figures) (December 2009) and Second Report (Litigation Funders, etc) (September 2010); M. Legg et al., “Litigation Funding in Australia” [2010] University of NSW Faculty of Law Research Series 12 (full text available via Austlii); Murphy, B. and Cameron, C., “Access to Justice and the Evolution of Class Action Litigation in Australia” (2006) M.U.L.R. 399Google Scholar; Mulheron and Cashman, “Third Party Funding of Litigation”, pp. 332–41; Cashman, P., Class Action Law and Practice (Sydney 2007)Google Scholar, ch. 3.

19 Stiftung Salle Modulable v Butterfield Trust (Bermuda) Ltd. (S.C. of Bermuda, 21 February 2014), at [328]–[329].

20 E.g. Price Waterhouse Coopers Inc v National Potato Co-operative Ltd. [2004] ZASCA 64.

21 See BEUC, Litigation Funding in Relation to the Establishment of a European Mechanism of Collective Redress (Rep. X/2012/007, 2 February 2012), Section III.

22 Thema Intl Fund plc v HSBC Institutional Trust Services (Ireland) Ltd. [2011] IEHC 357, at [5.4] (“the situation in this jurisdiction is different, in that professional third party funding is not permitted”).

23 Namely the non-recoverability of both the success fee under a Conditional Fee Agreement and the cost of an ATE premium policy from the defendant. The introduction of contingency fees (damages-based agreements) has not proceeded smoothly either, as discussed later in this article. These difficulties were discussed in several responses to the CJC conference on the Jackson Reform Implementation (Victoria House, London, 21 March 2014) (copy on file with the author).

24 Schedule 8 of the Consumer Rights Bill 2013/14 contains a new collective action for competition law grievances which, if enacted, will be an opt-in or an opt-out regime, depending upon the judicial choice of the Competition Appeal Tribunal which determines the case at certification. At the time of writing, the Bill is about to enter the Public Bills Committee (Lords) for debate, having proceeded through the House of Commons earlier in 2014. Whilst the drafters of the legislation have prohibited contingency fees from being used to fund opt-out collective proceedings (per section 47C(8)), no similar ban on the Third Party Funding of these actions has been specified. Various complexities of the proposed competition law class action are explored further by the author in “Third Party Funding and Class Actions Reform: Emerging Statutory and Legal Conundrums from a Comparative Perspective” and “Poles Apart: Why England had (Defensibly) Departed from the European Commission's Recommendation on Class Actions” (both forthcoming in 2014/15).

25 The PRA authorises “regulated activities”, which includes the promoting, arranging, and providing of insurance, per <http://www.bankofengland.co.uk/pra/pages/default.aspx>. However, Funders do not provide these particular services as part of their funding businesses, and hence do not fall within the PRA's remit.

26 The FCA has the two statutory objectives of “promot[ing] the safety and soundness of these firms and, specifically for insurers, and contribut[ing] to the securing of an appropriate degree of protection for policyholders” per <http://www.fca.org.uk/consumers/financial-services-products>. Funders do not provide insurance products as part of their funding businesses.

27 This Scheme only covers business conducted by firms which are authorised by the FCA and the PRA to conduct regulated financial services, as outlined at <http://www.fscs.org.uk/what-we-cover/about-us/>.

28 Funders are different from Claims Management Companies, whose principals do engage in advice regarding the commencement, conduct, and settlement of litigation (and hence CMCs may be required by written notice, by Reg. 21 of the Compensation (Claims Management Services) Regulations 2006 (SI 2006/3322), to “take out a policy of professional indemnity insurance in accordance with specified conditions in respect of the person's activities in providing regulated claims management services”).

29 Judicially pointed out e.g. in Bayens v Kinross Gold Corporation [2013] ONSC 4974, at [4], where Perell J. stated, of Harbour Litigation Funding, that it “is headquartered in London, and it acts as investment advisor to HF2. They are authorised and regulated by the Financial Conduct Authority, the regulator for financial services in the UK” (emphasis added).

30 Witnessed recently e.g. by the events surrounding the voluntary withdrawal of Argentum Capital Ltd. from the ALF, due to the fundraising practices of an entity/investor said to be closely associated with that Funder, which practices were alleged to be allied to a Ponzi scheme. See e.g. D. Marchant, “CISE Suspends Argentum Capital after Offshore Alert Exposes Ponzi Scheme” (Offshore Alert, 22 February 2014); and “Funding Fail: Argentum Exits Association of Litigation Funders” (The Lawyer, 30 April 2014). For the ALF's close involvement in the enquiries, see the announcement at <http://associationoflitigationfunders.com>.

31 Per cl. 7(d). Sir Rupert Jackson endorsed this as a “reasonable balance between practicality and client protection”: Sixth Lecture in the Civil Litigation Costs Review Implementation Programme (RCJ, 23 November 2011), at [3.5]. The time period of 36 months was chosen as it was “regarded as longer than the average life cycle from entering the funding agreement to the conclusion of the litigation”: Pirozzolo, R., “Third Party Funding” in Pirozzolo, (ed.), Litigation Funding Handbook (London 2014)Google Scholar, ch. 10, 157.

32 Per cl. 9.4.2. In (January 2013) 88 Litigation Funding, Mr. Leslie Perrin, the Chairman of the ALF, stated that “the minimum capital requirement be reviewed at least annually by the ALF, in the expectation that the amount of minimum capital required of Funder Members will be increased in the future” (p. 12).

33 Per cl. 9.4.3.

34 Per cl. 9.4.4. The Funder does not need to provide the actual financial statements themselves, so as to preserve privacy and confidentiality of that information.

35 Per cl. 9.4.4.2.

36 Per the opening words of cl. 9.4.

37 Per r. 3.15.5.

38 E.g. in the Jackson Final Report, ch. 11, at paras. [3.1]–[3.4]; in empirical research (see e.g. the detailed and informative report by C. Hodges, J. Peysner, and A. Nurse, Litigation Funding: Status and Issues (January 2012), 80, 123) and at conferences (e.g. “The Future of Third Party Litigation Funding: Regulatory Challenges and Assessing the Impact of Civil Justice Reform” (Westminster Legal Policy Forum, London, 12 December 2013), in which the US Chamber of Commerce was particularly critical of the capital adequacy requirements).

39 See cll. 2.1 and 2.2. Previously cl. 2 of the 2011 Code.

40 Per cl. 2.1.

41 Per cl. 2.2.

42 Per cl. 8.

43 Per cl. 2.5.

44 Per cl. 10.

45 The effect of the wording of cl. 9.4 and of its various sub-clauses.

46 Per cl. 5, and reiterated in new rule 3.4 of the 2014 ALF Rules of Association.

47 Per cl. 4.

48 Examples provided to the author by Mr. Leslie Perrin, Chairman of the ALF, during recent discussions, and mentioned herein with Mr. Perrin's permission.

49 Per cl. 1.

50 Jackson Final Report, ch. 11, at para. [2.12] (emphasis added). See also Sir Rupert Jackson's Sixth Implementation Lecture, at para. [4.1] (“I anticipate that solicitors will be advising their clients only to enter funding agreements with litigation funders who sign up to the Code and comply with its provisions”).

51 As noted by some speakers at the Westminster Legal Policy Forum conference, “The Future of Third Party Litigation Funding: Regulatory Challenges and Assessing the Impact of Civil Justice Reform” (London, 12 December 2013), and cited in “Focus on Funding” (February 2014) 89 L.F. 20. See too, the concerns expressed by Hodges, Peysner and Nurse, Litigation Funding: Status and Issues, pp. 141–152.

52 See (February 2014) 89 L.F. 23–25 (one of those 16 is an Overseas Funder Member). Each Funder Member is detailed on the ALF website at <http://associationoflitigationfunders.com/>.

53 Access to Justice Arrangements (Issues Paper, September 2013), 37. Re the earlier debate in Australia about the mooted statutory regulation of Funders, see e.g. Mulheron and Cashman, “Third Party Funding of Litigation”, pp. 321–22, referencing e.g. the report by the Standing Committee of Attorneys General (SCAG), Litigation Funding in Australia (May 2006).

54 For details of the review, see <http://www.pc.gov.au/projects/inquiry/access-justice> and, in particular, Access to Justice Arrangements (Draft Report, 8 April 2014), 68, and Recommendation #18.2.

55 At the time of writing, the Commission has provided its final report to the Australian Government (on 5 September 2014), but its content has not yet been made public.

56 See, e.g. M. Papadakis, “Funding Licence Splits Sector” (Australian Financial Review, 5 September 2014); M. Papadakis, “A-G's Advisory Panel Put on Hold” (Australian Financial Review, 29 August 2014); C. Merritt, “Brandis Takes Aim at Litigation Funders” (The Australian, 19 July 2013); Herbert Smith Freehills, “Senator Brandis Advocates for Funding Reform” Class Actions Update (January 2014).

57 See C. Merritt, “Call to Put Interests of Litigation Funders before Shareholders” (The Australian, 12 September 2014); C. Merritt, “Making it Tougher for Plaintiffs to Fish for Information” (The Australian, 21 March 2014). Reference is made therein to a much-publicised proposal by the US Chamber Institute for Legal Reform that the Australian Government implement a licensing regime for Funders operating in that jurisdiction, entailing prudential supervision, minimal capital adequacy, annual auditing, and reporting obligations, enforced by the Australian Securities and Investments Commission. The full submission is available at <http://www.pc.gov.au/__data/assets/pdf_file/0019/129115/sub025-access-justice.pdf>.

58 As described e.g. in J. Walker, “Litigation Funding Rules Face Scrutiny” (The Australian, 2 August 2013); J. Emmerig and M. Legg, “Litigation Funding in Australia: A Tangled Web” [2013] C.D. 48.

59 Contained in Pt IVA of the Federal Court of Australia Act 1976 (in effect 3 March 1992). Many leading Australian cases on Third Party Funding have arisen in class actions, as discussed in Mulheron and Cashman, “Third Party Funding of Litigation”.

60 [2001] CAT 4 (Sir Christopher Bellamy (President), Ann Kelly, Adam Scott).

61 Ibid., at paras. [11], [180]–[181].

62 Pursuant to section 2(1)(b).

63 See description at [2001] CAT 4, at para. [254].

64 Jackson Final Report, ch. 11, at paras. [3.2]–[3.4].

65 Ibid., at para. [3.2].

66 Ibid., at paras. [2.12] and [3.4].

67 Champerty is “a particular kind of maintenance, namely maintenance of an action in consideration of a promise to give to the maintainer a share in the subject-matter or proceeds thereof, if the action succeeds”: EWLC, Proposals for the Reform of the Law relating to Maintenance and Champerty (Rep. 7, 1966), at [4].

68 Maintenance is “the giving of assistance or encouragement to one of the parties to an action by a person who has neither an interest in the action nor any other motive recognised by the law as justifying his interference”: EWLC, ibid., at para. [3].

69 Pursuant to s. 13(1) of the Criminal Law Act 1967.

70 Pursuant to s. 14(1) of the Criminal Law Act 1967.

71 EWLC, Proposals, at paras. [9]–[15].

72 Solicitors' Code of Conduct 2007, r. 9.01(4), “Referrals of Business”.

73 See e.g. Sibthorpe v Southwark LBC [2011] EWCA Civ 25, at [15], citing Factortame [2003] Q.B. 381 (CA), at [31]. Also Massai Aviation Services v AG [2007] UKPC 12, at [12].

74 Noted, obiter, in Arkin v Borchard Lines Ltd. [2005] EWCA Civ 633, at [40].

75 Geraghty & Co. v Awwad [1999] EWCA Civ 3002 (where the court was dealing with a Conditional Fee Agreement though and not an LFA).

76 But only where an abuse of process is proven: Abraham v Thompson [1997] 4 All E.R. 362 (CA), at [374], [378], and see on that point Grovewood Holdings plc v James Capel & Co. Ltd. [1995] Ch. 80, at [87]–[88].

77 Harcus Sinclair (a firm) v Buttonwood Legal Capital Ltd. [2013] EWHC 1193. The author is grateful to Mr. Perrin, Chairman of the ALF, for drawing her attention to this case.

78 Barclays Wealth Trustees (Jersey) Ltd. v Equity Trust (Jersey) Ltd.) [2013] JRC 94.

79 Re Valetta Trust [2012] 1 JLR 1.

80 Per cl. 9.

81 This section draws upon, and updates, the discussion in Mulheron and Cashman, “Third Party Funding of Litigation”, pp. 334–40.

82 Factortame [2003] Q.B. 381 (CA), at [36], per Lord Phillips M.R.

83 Per cl. 7(a)).

84 Jackson Final Report, ch. 12, at para. [4.1] and Recommendation [5.1(ii)].

85 MOJ, Reforming Civil Litigation Funding and Costs in England and Wales: Implementation of Lord Justice Jackson's Recommendations: The Government Response (Cm. 8041, March 2011), 7, para. [13].

86 [1994] 1 AC 142 (HL), at [163].

87 [1994] 1 AC 142 (HL), at [164].

88 [2005] EWCA Civ 655, at [14], [40].

89 [2003] Q.B. 381 (CA), at [27], [87]–[89].

90 [2012] 1 JLR 1, with the terms noted at [8].

91 Re Trepca Mines Ltd. (No. 2) [1963] Ch. 199 (CA), 219, and cited e.g. in Lewis v Tennants Distribution Ltd. [2010] EWHC 90161 (Costs), at [7].

92 Massai Aviation Services v A.G. (The Bahamas) [2007] UKPC 12, at [20]; British Cash and Parcel Conveyors v Lamson Store Service Co. Ltd. [1908] 1 K.B. 1006 (CA), 1014.

93 [1994] 1 A.C. 142 (HL), at [164].

94 (2004), 248 D.L.R. (4th) 349, at [53].

95 [2005] NSWSC 741 (27 July 2005), at [74]–[75] per McDougall J.

96 (Ontario, Master Albert, 27 June 2005), at para. [63]. The proceedings were stayed.

97 Factortame [2003] Q.B. 381 (CA), at [84]–[85], per Lord Phillips M.R.

98 [2012] EWHC 723, Ch., at [99].

99 Royal Court, Samedi Division, 25 November 2011, at [8], and see also paras. [30]–[31], [36]. Harbour Litigation Investment Fund LP provided the funding in this case.

100 (Commercial Court, Civil Jurisdiction, 21 February 2014), at [329] (also funded by Harbour Litigation Funding).

101 Per cll. 10.1–10.3.

102 [2000] EWCA Civ; [2001] C.L.C. 1267, at [62].

103 Royal Court, 25 November 2011, at [30], [36], and affirmed on appeal: [2012] 1 JLR 1.

104 Noted Ibid., at para. [6].

105 [2013] EWHC 3708, Ch., at [169], per Morgan J.

106 [2013] ONSC 4974. The LFA was entered into by Harbour Fund II (an investment arm of Harbour Litigation Funding Ltd.).

107 Ibid., at para. [37].

108 Pursuant to s. 51(1) of the Supreme Court Act 1981.

109 Arkin, at paras. [40] (emphasis added) and [45] (otherwise, the Funder will be liable for the full adverse costs).

110 [2005] EWCA Civ 655; [2005] 1 W.L.R. 3055 (CA), per Lord Phillips M.R., with Brooke L.J. and Dyson L.J. concurring.

111 Ibid., at para. [1].

112 See, on that point, e.g. Aiden Shipping Co. Ltd. v Interbulk Ltd., The Vimeira (No. 2) [1986] A.C. 965 (HL); Dymocks Franchise Systems (NSW) Pty Ltd. v Todd [2004] UKPC 39 (on appeal from New Zealand); CIBC Mellon Trust Co. v Stolzenburg [2005] EWCA Civ 628; Jackson v Thakrar [2007] EWHC 626 (TCC).

113 [2005] EWCA Civ 655, at [38] (emphasis added), and see also paras. [39], [41]–[42].

114 Jackson Final Report, ch. 11, at para. [4.6].

115 Ibid., at para. [4.7].

116 Tinseltime Ltd. v Roberts [2012] EWHC 2628; [2012] 6 Costs L.R. 1094 (TCC), at [37]; Merchantbridge & Co. Ltd. v Safron General Partner 1 Ltd. [2011] EWHC 1524, Comm., at [46].

117 [2005] EWCA Civ 655, at [41].

118 Tinseltime [2012] EWHC 2628 (TCC), at [37].

119 [2011] JRC 227 (Jersey Royal Court, Samedi Division), at [29]. For topical commentary, see e.g. Sanders, N., “A Policy Decision” (2013) 85 L.F. 20Google Scholar; “Litigation Funding Agreements” (2013) 17 J.G.L.R. 388Google Scholar.

120 Ibid., at paras. [32], [31].

121 From discussions with the ALF, which were very helpful on this point.

122 As in Stone & Rolls (in liq.) v Moore Stephens [2009] UKHL 39; [2009] 1 A.C. 1391 (HL).

123 As cited in Jackson Final Report, ch. 11, at para. [2.2(i)].

124 Ibid., at para. [2.8].

125 Per cl. 11.2.

126 Per cl. 9(b)(i)–(iii).

127 Per cl. 12 (which repeats cl. 10 of the 2011 Code).

128 Per cl. 13.1.

129 See note 48 above.

130 Per discussions between Mr. David Greene, Senior Litigation Partner, Edwin Coe LLP, and the author, and referred to herein with Mr. Greene's permission.

131 Per cl. 11.2.1 of the 2014 Code.

132 [2013] EWHC 1193, Ch., per David Donaldson Q.C., sitting as a Deputy High Court Judge.

133 Ibid., at para. [1].

134 Argentum Legal Services, a company related to Argentum Investment Management Ltd., provided services to Funders such as Buttonwood, including the monitoring and advising on litigation which was the subject of such funding (Ibid., at para. [19]).

135 Ibid., at para. [43] and fn. 6.

136 Noted e.g. in S. Netherway, “Defendant Insurers Could Benefit from Litigation Funding Ruling Lesson” (2013) 157 Lloyd's List Insurance Day (31 October 2013); “Hub of the Wheel” (2013) 88 L.F. 10; Kaye, F., “Withdrawal Symptoms: When Funders Pull Out” (2013) 157 Solicitors' Journal 27Google Scholar.

137 But not for “contentious business”, per s. 59(2)(b) and s. 87(1) of the Solicitors Act 1974. However, contingency fee agreements were long used in the Employment Tribunal and the Tax Chamber, given that work in tribunals was viewed as being “non-contentious”, per Tel-Ka Talk Ltd. v HMRC [2010] EWHC 90175 (Costs Ct.), at [121].

138 Per s. 58AA of the Courts and Legal Services Act 1990, and the DBA Regulations 2010.

139 Jackson Final Report, ch. 12 and Recommendation 5.1(i).

140 E.g. it has been the subject of comment at several conferences since the Jackson reforms took effect.

141 The statutory caps or ceilings are as follows: 35% for an employment matter (Reg. 7); 25% for a personal injury claim (Reg. 4(2)(b)); and 50% for all commercial matters (Reg. 4(2)(b)).

142 A common law principle which precludes a claimant from recovering more by way of costs from the defendant than it is obliged to pay to its own legal representative: Jackson Final Report (2009), ch. 5.

143 As announced by the MOJ in its update, dated 1 August 2013, “Main Changes”, available at <http://www.justice.gov.uk/civil-justice-reforms/main-changes>.

144 The author has critiqued the drafting of the DBA Regulations 2013 (including the uncertainty surrounding the use of “hybrid DBAs”) elsewhere, e.g. “The DBA Regulations 2013: Some Conundrums in the ‘Brave New World’ of Funding” (2013) 32 C.J.Q. 241; “The Damages-Based Agreements Regulations 2013: A Rocky Road Ahead?” [2013] Practical Law Company (subscription-only article, identifier: 4–523–7972); and “Damages-Based Agreements” in Pirozzolo, R. (ed.), Litigation Funding Handbook (London 2014)Google Scholar, ch. 7. These criticisms fall outside the scope of this article. The author understands that the Regulations are currently under review by the MOJ.

145 E.g. Burford Hybrid DBA Product Description, available at <http://www.burfordcapital.com/how-we-help-uk/hybriddba/> and the Harbour Hybrid, discussed at <www.harbourlitigationfunding.com/articles/dbas-the-harbour-hybrid>. The operation of the Funders' “hybrid DBAs” also lies outside the scope of this article.

146 The original DBA definition, which applied to employment matters only, was inserted by the Coroners and Justice Act 2009, ss. 154(2) and 182(10)(e).

147 See cl. 9.3 of the 2014 Code and earlier cl. 7(c) of the 2011 Code.

148 See Section IIIA above. Indeed, as noted by Sir Rupert Jackson in the Sixth Implementation Lecture, the Funder's input “may on occasions be a positive asset for the client and its legal team”, at para. [3.9].

149 Unquestionably, a Funder is not covered by the Compensation (Claims Management Services) Regulations 2006, and is not required to apply for authorisation thereunder.

150 The Working Party met on four occasions in 2012, and made various recommendations to the MOJ regarding Contingency Fees. For its report, see <http://www.judiciary.gov.uk/about-the-judiciary/advisory-bodies/cjc/working-parties/contingency-fees>.

151 See note 3 above.

152 See Jackson Final Report, chh. 12 and 11, respectively.

153 See Reforming Civil Litigation Funding and Costs in England and Wales – Implementation of Lord Justice Jackson's Recommendations: Government Response (Cm. 8041, March 2011), at para. [13], [222].

154 E.g. “[o]nly qualified legal representatives, who are subject to regulation by their professional bodies and whose conduct may be subject to challenge through those bodies, will undertake civil litigation (i.e., contentious business). … therefore, at this stage, further regulations [re termination] is not required”: Explanatory Memorandum, at para. [7.5].

155 Inserted by s. 28 of the Access to Justice Act 1999, and see too, Mulheron and Cashman, “Third Party Funding of Litigation”, p. 319.

156 Per Standing Committee E, Access to Justice Bill (Lords) (13 May 1999).

157 Per Government legislation website at <http://www.legislation.gov.uk/ukpga/1990/41/section/58B>.

158 [2003] Q.B. 381, at [32].

159 Skywell (UK) Ltd. v HMRC [2012] UKFTT 611, at [12]. See also Simpson v Norfolk and Norwich University Hospital NHS Trust [2011] EWCA Civ 1149, at [24].

160 Jackson Final Report, ch. 11, at para. [1.2].

161 London & Regional (St. George's Court) Ltd. v MOD [2008] EWHC 526 (TCC), at [103], citing from the summary in Mansell v Robinson [2007] EWHC 101 (QB).