London holds global litigation crown amid calls for reform in funding industry
Litigation funding is a key concern among City litigators with a majority believing the Labour Government should prioritise regulatory reforms to provide greater clarity.
Most litigators (70 per cent) want the Government to prioritise litigation funding when considering further regulation, ahead of AI at 54 per cent. This is according to the Litigation Trends Survey by the London Solicitors Litigation Association (LSLA), shared exclusively with City PM.
Litigation funding is a financial arrangement where a third party pays the legal costs of a case in exchange for a share of the proceeds if the case succeeds. It allows people to take legal action they might not otherwise afford.
The Labour government has pushed the Litigation Funding Bill back until a review is concluded, which could be at least Summer 2025.
This survey stated that over half (52 per cent) have not yet decided whether they support the Bill, while 42 per cent support the bill and just 7 per cent do not.
Recently, Burford Capital CEO Chris Bogart told City PM that his firm was rolling back on using London for dispute resolution due to “uncertainties” as a result of delays to this Bill.
The survey, which includes a poll of LSLA’s 3500+ members, went on to highlight mental wellbeing as a pressing issue, with just 4 per cent of litigators finding it easy to manage workplace pressures.
The data revealed that 29 per cent stated litigation affects their mental health, and while 80 per cent would address issues within their teams, half feel uncomfortable doing so.
Most LSLA respondents answered that judges and arbitrators should be more mindful of the wellbeing and personal circumstances of legal counsel. Many think this is particularly necessary when it comes to deadlines, tone and communication.
The survey also highlights the extent to which technology has been reshaping the industry over the last year, with 60 per cent of litigators reporting increased use of AI. The survey suggested that optimism runs high, as 66 per cent view AI advancements as beneficial, though regulatory oversight is widely encouraged.
While respondents found that London retains its global litigation crown, with 88 per cent reporting no flight of work from the City in the last 12 months, while strong growth is forecast for the coming years as most litigators expect the market to grow – powered by a rise in class actions, ESG, AI, insolvency and business distress claims.