New Litigation-Funding Contender Enters Market

New Litigation-Funding Contender Enters Market

LawFuel.co.nz - NZ Law News, Law Jobs - www.lawfuel.co.nz Competition in the litigation funding market is heating up with the entry of a new player, Juria Capital, who have entered the market and expecting further venture capital investment in the first quarter of next year to further expand their operation.

The company provides funding for a variety of commercial, contractual and matrimonial disputes and faces competition from current operators, including Quantum Litigation and LPF Group.The increase in litigation funding vehicles in other jurisdictions has created alarm in some quarters, with the placement of profits over justice. But the increased use of litigation funding combined with radical scaling back of legal aid in both the UK and New Zealand, is likely to strongly support growth for the sector.

Juria director Finn Brooke said his company saw the continued growth of litigation funding internationally as encouragement to enter the local market, which Juria believe is under-serviced.

The increased cost of litigation, particularly in a ‘down’ economy, also made the funding option more attractive. He also pointed to “high level” judicial support for litigation funding, specifically Saunders v. Houghton. “Courts in most jurisdictions have now recognised that the correctly structured funding models increases access to justice and acts to rebalance the plaintiff-defendant relationship,” Finn Brooke said.The use of funding for various commercial issues, such as insider trading, related party transactions and the like could have well produced results for investors in the variety of cases that have recently plagued the local market, from Blue Chip to Vestar.Litigation funding is big business overseas. The largest funder in the region is IMF, a public listed company where the claim size is over $5 million. In the UK, a new entrant with $4 billion of assets has entered the market seeking alternative litigation funding for smaller commercial disputes.

As with the UK market, changes and downsizing to the legal aid pool is likely to see a significant increase in litigants pursuing fully-funded claims.“Litigation is often a David v Goliath affair.

Courts in most jurisdictions have now recognised that the correctly structured funding models increases access to justice and acts to rebalance the plaintiff-defendant relationship,” said Finn Brooke. “By increasing access to justice and allowing cases to run on merit rather than resources, litigation funding acts as a general disincentive to undesirable commercial conduct – increasing business confidence and growth across the board.”

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