It is now sometime since the government restricted or cut public funding for many types of legal proceedings. These cuts have led to many more people representing themselves in court (with the commensurate delays that involves). But another interesting side effect is the increasing interest in crowdfunding as a way of paying for litigation.
Crowdfunding is an online mechanism that allows people or organisations to present ideas for which funding is required. Typically the types of venture that attract crowdfunding are business start ups. Potential investors can then invest in ideas that they like, with the hope of getting a return on that investment. In 2014, the Financial Conduct Authority (FCA) issued a policy statement setting out its approach and a set of rules which were introduced on April 2014. Interestingly, the FCA did not consider the possibility of crowdfunding litigation in that policy document.
Since the FCA statement, websites have been set up specifically for the purpose of raising funds from the public to pay for litigation (mostly in the public interest field).
As with any investment and litigation, there are risks. If you want to take a case to court, you will need to take specialist advice as to the likelihood of success and the potential costs consequences if you lose. If you want to try and source money to fund litigation, you will need to ensure that your investors are fully aware of the risks.
This is a complex area in the relatively early stages of development. It is clear that in the current economic climate, there will not be an increase in public funding for litigation in the foreseeable future. This will lead to those wanting to bring cases to court to look for ever more inventive ways of funding that litigation.
To discuss this or any commercial litigation matter, contact us.