Scotland Is Underserved By Litigation Funders

Cat Maclean comments on the state of third-party funding in Scotland. Cat is passionate about third-party funding and has good reason to be. She secured victory for her client, Mr Carlyle, at the Supreme Court in a bank dispute case in 2015. A case that would not have been possible without third-party financing. Had this case not been financed Mr Carlyle would have been denied access to the justice he deserved.

It is interesting to observe that the practice of champerty has never been illegal in Scotland. It was of course prohibited in England and Wales for many years. To prevent unmeritorious litigation the Scottish courts have always had the power to impose liability for expenses on any person who clearly has control of the litigation. Such an individual is known as a dominus litus. The courts have, however, used this option on very few occasions.

Cat states that Scotland can be: “anywhere from years to decades behind England, and the TPF litigation market in Scotland is no exception.”

Cat is optimistic about the future and feels that the introduction of the ABS regime coming into effect will have a positive impact. The ABS is regulation for Alternative Business Structures in Scotland. The main thrust of the regulation is to allow legal services businesses to be owned by non-solicitors. This will benefit the legal services industry by opening up access to the market.

Restitution is currently the only Scottish registered third party funder backed by Scottish investors. Restitution was the funder that backed Mr Carlyle’s case. The firm was established in 2012 but lacking resources has struggled to grow and move south.

The big firms based in England have continued their growth and are very well resourced in comparison.

References:

[1] http://www.scottishlegal.com/2017/03/01/scotland-behind-the-times-on-third-party-funding/

[2] http://www.lawscot.org.uk/members/legal-reform-and-policy/abslicensed-provider-updates/abs-news-archive/

[3] https://mbmcommercial.co.uk/News-Events/News/Where-there-is-a-will-there-is-a-lawsuit-third-party-funding-of-litigation-in-scotland.html