With this week's collapse of LAMP Insurance (a leading after-the-event insurer), it's perhaps more important than ever to check the credentials of any litigation funder or ATE insurer that you may be considering using.
Some of the "rogues" to watch out for include:
- aspiring funders without a genuine fund, who seek to engage clients first and then use those cases to raise the capital needed;
- intermediaries who hold themselves out as experienced "brokers" when in fact they are simply an "introducer" with no specialist knowledge;
- under-capitalised funders with inadequate experience of the litigation funding market, who are often using out-dated risk assessment processes or pricing models.
As it becomes more expensive for businesses to take claims to court, the benefits of obtaining litigation funding (where a third party pays your legal costs in return for a share of the damages) and ATE insurance (where the insurer pays the other side's legal costs if you lose your claim) continue to become more attractive to companies wanting to pursue legal claims without it negatively affecting their balance sheets. But as with any specialist area in business, it is important that you make sure you talk to a genuine expert when considering your options.
If you have any queries about litigation funding or ATE insurance, please get in touch with me at email@example.com.
We have seen numerous market casualties of what we will call “rogue players”, companies that have entered the market offering products and services built on sand.