Litigation funding wasn’t always where it is today. In fact, just a few short years ago, it was barely even a factor in the United States. Before litigation funding firms made justice more accessible to people of all economic backgrounds, winning court cases was often reserved for the rich. Read on to learn more about the brief history of litigation funding and services.
It Began in Australia
Not too long ago, in the mid-1990s, litigation financing was born in Australia. It began with legislation that allowed insolvency practitioners to create contracts that essentially viewed legal claims as corporate property. As in any capitalistic society, litigation funding firms quickly grew in response to the new legislation, making it easier for companies to access this new ability.
Class-action lawsuits were also new to Australia at the time, and litigation funders quickly hopped on that train, too. By 2006, the Australian High Court determined that these third-party funders were legitimate, and so they stuck around.
The Move to the United Kingdom
Although litigation funding started in the UK around the same time as it did in Australia, there was a divergence in paths. In 1990, Parliament passed the Courts and Legal Services Act. This allowed lawyers to agree to conditional deals with their clients—deals that are now commonplace in the US. For instance, many attorneys promise that you won’t need to pay unless you win your case. Once that restriction was lifted in the UK, litigation funding was the natural next step.
Finding Its Way to the United States
Here in America, individual states generally decide on laws regarding pre-settlement funding. Through the last 20 years, litigation funding has become more normalized, and it’s generally viewed as a positive practice that puts the power back into the hands of the people.
Now that you know the brief history of litigation funding and services, we hope you can see how lucky we are in the US to have access to this option. With litigation funding, more people than ever can have their day in court.