On the 1st of June 2017 the Scottish Government introduced the Civil Litigation (Expenses and Group Proceedings) Bill. Most of the discussion to date has centred around the introduction of Damages Based Agreements and Speculative Fee Agreements. For those avid readers of this blog, however, Part 2 Section 10 is likely to be of deep interest.
The Scottish Government has set out provisions which allow them the power to request disclosure of any financial assistance. The party receiving financial assistance must disclose to the court:
- The identity of the funder.
- The nature of assistance being provided and the financial interest the funder has in respect of the outcome of the proceedings.
- Additionally, any intermediary involved must also be disclosed to the court.
The court is also able to not only make an award of expenses against the funder but also any intermediary involved.
Importantly this section is subject to an act of sederunt being filed under section 103(1) or 104(1) of the Courts Reform (Scotland) Act 2014. An act of sederunt is secondary legislation made by the supreme civil court of Scotland, to regulate the proceedings of Scottish courts and tribunals hearing civil matters.
It is not completely clear from the legislation if all parties must disclose funding in every scenario or if this will just be used in certain circumstances. It appears to suggest the former but we will await further guidelines.
Chris Deadman from Invicta Capital Funding comments:
“…Regarding the requirement in Scotland to disclose the existence of an external funder, I would not say that this will cause funders any undue concern. Indeed, revealing that a funder is backing a claimant’s case can assist in focussing the mind of a defendant hitherto determined to drag matters out. Scotland remains a relatively untapped market for litigation finance although it is pleasing to see that the climate is becoming more favourable. Invicta is very keen to work with law firms in Scotland to devise solutions to their clients funding needs.”