Part II

Other funding of legal services

Conditional fee and litigation funding agreements

Litigation funding agreements.
28
In the Courts and Legal Services Act 1990, after section 58A (inserted by section 27 above) insert—

Litigation funding agreements.
58B
1
A litigation funding agreement which satisfies all of the conditions applicable to it by virtue of this section shall not be unenforceable by reason only of its being a litigation funding agreement.
2
For the purposes of this section a litigation funding agreement is an agreement under which—
a
a person (“the funder”) agrees to fund (in whole or in part) the provision of advocacy or litigation services (by someone other than the funder) to another person (“the litigant”); and
b
the litigant agrees to pay a sum to the funder in specified circumstances.
3
The following conditions are applicable to a litigation funding agreement—
a
the funder must be a person, or person of a description, prescribed by the Lord Chancellor;
b
the agreement must be in writing;
c
the agreement must not relate to proceedings which by virtue of section 58A(1) and (2) cannot be the subject of an enforceable conditional fee agreement or to proceedings of any such description as may be prescribed by the Lord Chancellor;
d
the agreement must comply with such requirements (if any) as may be so prescribed;
e
the sum to be paid by the litigant must consist of any costs payable to him in respect of the proceedings to which the agreement relates together with an amount calculated by reference to the funder’s anticipated expenditure in funding the provision of the services; and
f
that amount must not exceed such percentage of that anticipated expenditure as may be prescribed by the Lord Chancellor in relation to proceedings of the description to which the agreement relates.
4
Regulations under subsection (3)(a) may require a person to be approved by the Lord Chancellor or by a prescribed person.
5
The requirements which the Lord Chancellor may prescribe under subsection (3)(d)—
a
include requirements for the funder to have provided prescribed information to the litigant before the agreement is made; and
b
may be different for different descriptions of litigation funding agreements.
6
In this section (and in the definitions of “advocacy services” and “litigation services” as they apply for its purposes) “proceedings” includes any sort of proceedings for resolving disputes (and not just proceedings in a court), whether commenced or contemplated.
7
Before making regulations under this section, the Lord Chancellor shall consult—
a
the designated judges;
b
the General Council of the Bar;
c
the Law Society; and
d
such other bodies as he considers appropriate.
8
A costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring the payment of any amount payable under a litigation funding agreement.
9
Rules of court may make provision with respect to the assessment of any costs which include fees payable under a litigation funding agreement.
Words in s. 28 substituted (12.1.2006) by The Transfer of Functions (Lord Chancellor and Secretary of State) Order 2005 (S.I. 2005/3429), art 8, Sch. para. 4(b)
Pt. 2: functions of the Lord Chancellor transferred (19.8.2003) to the Secretary of State by The Secretary of State for Constitutional Affairs Order 2003 (S.I. 2003/1887), art. 4, Sch. 1 (with art. 6)
Pt. 2: functions of the Secretary of State transferred (12.1.2006) to the Lord Chancellor by The Transfer of Functions (Lord Chancellor and Secretary of State) Order 2005 (S.I. 2005/3429), art. 3 (with arts. 4, 5)