The Working Party that drafted the Code was chaired by Michael Napier CBE, QC (Hon) (Irwin Mitchell) and included Professor Rachael Mulheron (Queen Mary University of London, member of the Civil Justice Council); Timothy Mayer (Woodsford Litigation Funding Ltd); Susan Dunn (Harbour Litigation Funding Ltd); Leslie Perrin (Calunius Capital LLP, Chairman of The Association of Litigation Funders); and Rocco Pirozzolo (QBE).
The Code sets out the standards by which all full funder members of the ALF must abide, and meets each of the key concerns set out by Lord Justice Jackson in his Civil Litigation Costs Review.
The Code requires funders to maintain adequate financial resources at all times in order to meet their obligations to fund all of the disputes they have agreed to fund, and to cover aggregate funding liabilities under all of their funding agreements for a minimum period of 36 months.
The Code provides that funders must behave reasonably and may only withdraw from funding in specific circumstances. Where there is a dispute about termination or settlement, a binding opinion must be obtained from an independent QC, who has been either instructed jointly or appointed by the Bar Council.
Under the Code, funders are prevented from taking control of litigation or settlement negotiations and from causing the litigant’s lawyers to act in breach of their professional duties. This is in line with the practice, in England & Wales, of keeping the roles of funders, litigants and their lawyers separate. Because of their interest in the litigation, funders may ask to be kept informed of the progress of the case. Some funders may also have considerable litigation experience that could benefit the litigant and its legal team.