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Regulate litigation funding, say 88% of London litigators


A ‘staggering’ four out of five London litigators are involved in cases where one or both parties are financed by a litigation funder – and nine out 10 litigators believe it is time the third-party finance sector was regulated.

These are among the headline findings of this year’s litigation trends survey, conducted by the London Solicitors Litigation Association. President Nicholas Heaton, head of competition litigation at international firm Hogan Lovells, delivered a preview at the association’s annual dinner at the Law Society last night. 

Last year 60% of respondents predicted growth in litigation, but only 50% have experienced growth in the last 12 months. Just 14% suffered a decline in activity.

Some 60% also predict growth in the coming 24 months – ‘encouraging but not a boom’. According to Heaton the ‘most encouraging’ result this year for London litigators was that 94% reported they have not lost material litigation work to other jurisdictions or arbitration in the last 12 months. 

Nicolas heaton

He added: ‘A staggering 79% of respondents have some cases in which one or more parties are using litigation funding. Given this, one might think that the judgment of the Supreme Court in the PACCAR case, making some of those arrangement unenforceable, would be a major concern. However only about 10% of respondents foresee a reduction in the availability of funding or increase in its cost as a result.

‘Eighty-eight percent did think however that further regulation of some kind was required for litigation funding.’

The association also quizzed litigators on the impact of artificial intelligence. Said Heaton: ‘About 45% of respondents said their firms were already using AI in litigation – mostly for AI-assisted disclosure. Nearly everyone thought the use of AI would increase, but people seemed reasonably optimistic that that would be beneficial, with 70% thinking it would reduce cost of litigation and 35% thinking it might speed proceedings up. Only 25% foresee loss of jobs for solicitors.

‘The picture remains broadly positive, but it is clear there is much change afoot,’ he concluded.



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