A compelling piece of research by RPC into the growing litigation funding market in the UK. RPC notes that the Jackson reforms, which include the abolition of both the recoverability of success fees and after-the-event insurance, have provided a boost for the sector. Post Jackson, the industry appears to be going from strength to strength and is now viewed as an alternative asset class.
Investments in litigation in the UK have increased £25m in value in the last year as the sector gains increasing traction amongst business. According to research from City firm RPC, litigation funders committed £723m to legal claims in 2016, compared to £575m in 2015. The figures are based on the balance sheets of the 20 biggest independent litigation funders, who agree to pay legal costs for individuals or businesses in exchange for a share of any damages won. RPC said hedge funds or private equity houses see litigation funding as an attractive ‘alternative asset class’ as returns are uncorrelated to the stock market or bond returns.