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Coronavirus - Commercial Court and Litigation Funding - Northern Ireland

  • Northern Ireland
  • Coronavirus
  • Coronavirus - Country overview

05-05-2020

Commercial Court – a return to action?

On 4 May 2020, the Commercial Court Judge in Northern Ireland, the Honourable Mr Justice Horner, circulated an update to legal professionals stating clearly that the Commercial ‘Hub’ is open for business, and that the Hub is prepared to consider any reasonable suggestion for hearing cases and/or applications.  The Judge explained that he has just recently heard an application to enforce an adjudication award in a construction case, which he dealt with ‘on the papers’ and that this worked very successfully. The Judge's message is that it is very important that the commercial community in Northern Ireland does not feel that its needs are being ignored at this difficult time, and that solicitors, barristers and clients should be prepared to be innovative, imaginative and collaborative in agreeing directions for hearings and how those hearings should be shaped. The Judge went on to note that he will hear applications in cases remotely, and will also hear full cases remotely, as far as is possible. 

With the limitations of the technology that is available to the Courts Service in Northern Ireland, a lack of Court staff on site, and a number of other constraints, it will be extremely difficult for a full ‘remote’ trial to be held at the present time. The Judge’s comments do however strike a positive note in relation to Commercial Court business, particularly when coupled with the Lord Chief Justice's update on 24 April 2020, which noted that he had initiated reviews of some cases that were listed in the Court of Appeal and High Court "with a view to commencing the gradual and incremental recovery of Court business". 

The health and safety of clients, practitioners, judges and Court staff does of course remain paramount, and no-one wants to do anything to jeopardise this. For businesses that need their important cases dealt with, however, there are at least some signs of encouragement.

Funding of Claims

Particularly at a time like this, where cash and resources are king, there is a need to think innovatively and creatively about how to fund the bringing of claims (and, in some instances, the defencing of claims). 

The traditional model in Northern Irish civil litigation has been that a party wishing to bring a claim agrees fee estimates with its solicitors, and then pays its solicitors, plus the cost of any disbursements such as experts and barristers, as the case goes along. In these straightened times, however, it may simply not be possible or desirable to release cash on what is potentially a good and valuable claim, when that cash and resource may well urgently be required in other areas. At Eversheds Sutherland, we would encourage you to talk to us about these issues. Whilst conditional fee agreements (the classic 'no win, no fee agreements'), so beloved of daytime television adverts, are not legal in Northern Ireland, two things that are legal, however, are third party litigation funding and after‑the‑event insurance.

Third party litigation funding works on the premise that a third party, usually a highly sophisticated commercial funder, will, if so approached, assess the merits of a claim and, if it feels that the claim is sufficiently meritorious, will provide funding upfront to enable the party to actually pay for the litigation as the case progresses. The funder would take a share of any damages or favourable settlement obtained at the end of the case. This can be coupled with policies of after‑the‑event insurance, which provides cover in appropriate cases for third party disbursements, such as barristers, experts, and also can insure against the risk of having to pay the other side's legal fees if a case is lost.

There are some common misconceptions with such products, including, for example, that a funder would 'take control' of a case and would take the decision-making away from the client and its solicitors.  This is not the case; the client and its solicitors retain control of the litigation including the key decisions as to the conduct of the case, whether to settle it, etc. This is subject to some limited exceptions. Another misconception is that this is horribly expensive. Again, this is not the case; premia can be worked out very favourably, and funding can be provided on the biggest of cases and also very small cases. The range of funding options and solutions is very broad, and for the right case, a funding package can usually be found.

As a firm, Eversheds Sutherland has a tie-in with Harbour Litigation Funding, a very experienced litigation funder in the market. There are shelf-ready products that are ready to use in the appropriate case and in the appropriate circumstances. The key point is that by effective use of such products, it is possible to take claims largely “off balance sheet”, and treat them as assets rather than potentially onerous burdens.

Northern Ireland has so far not seen much use of third party funding or indeed after-the-event insurance in civil litigation, but there is no better time for clients and their lawyers to think creatively about how to both bring and, in some instances, defend claims using the alternative and innovative tools that are out there.

For further information and to discuss any possible matter that may suit such funding, please do not hesitate to get in touch.