I am intrigued by litigation funding. An Irish Judge once said: “In England, justice is open to all-like the Ritz Hotel”. How can justice, like the doors of the Ritz hotel, be open to all if only the wealthy can afford lawyers fees? Is litigation funding the answer or part of the solution?
Litigation funding, generally speaking, arises where a third party provides financing to a person to enable them to litigate or arbitrate a claim. The Funder may obtain a share of the proceeds of the claim.
Historically, in England, a third party could not invest in a person’s litigation because of the rules of maintenance and champerty. A third party could not profit from such court proceedings. However, since 1967 litigation funding in the UK has been permitted. The notion that a third party can benefit from financing another’s litigation has attracted criticism, and there are issues other which fall outside the scope of this note. My interest in litigation funding was recently reactivated when I read about the enforcement of a judgment made in a Russian billionaires divorce case in London.
The wife, Tatiana Akhmedova, obtained judgment in 2016 against her husband, who has consistently avoided making payment. The wife used litigation funding to pursue the husband zealously. The husband’s QC has noted publicly that litigation funding should not apply in the UK. He further argues that it promotes discord and disharmony in families. A laudable argument, or so you would think.
The counter-argument is that enforcement of a judgment of an English court is a civil matter and not a family law matter and that as such, the husband should stop whining and pay up.
I should point out that the judgment was obtained without litigation funding and is in the region of 453 million pounds which is only a fraction of the husband’s overall wealth.
I suspect that in common with many billionaires, the husband is accustomed to having his way and was not happy with the order and will do all within his extensive power to defeat his wife’s claim. He has exhausted all appeal avenues which were open to him.
This current example of litigation funding and its ups and downs reminds me of my opening comment about the courts of justice, like the Ritz Hotel, being open to everyone. Even as a law student and before becoming involved in the nitty-gritty of lawsuits, I wondered about the judge’s wisdom in making such an analogy. Anyone who has crossed the threshold of a Ritz Carlton hotel will immediately testify to the cost of enjoying the services of these palatial hotels.
If a system of justice is to be genuinely that namely a system capable of fairness and open to all then there must be a funding arrangement in place to enable customers of the courts to avail themselves of the necessary legal counsel to have their day in court. If funding is denied, then justice is also denied.