Jostling for a larger piece of the (class) action

Both third-party litigation funders and plaintiff lawyers have attempted to improve their competitive positions in the class action market. First, in an environment with very little regulation, litigation funders have sought court approval for the introduction of a ‘common fund’ that would dramatically tilt the cost-benefit calculus in favour of the funder, providing them with far greater certainty about the risks involved in funding a particular action. Second, entrepreneurial lawyers have tested some questionable strategies designed to circumvent the prohibition on lawyers charging contingency fees. To date, neither has succeeded but their efforts have prompted discussion about the way class action litigation should be funded, who should be allowed to fund it and the need for greater regulation.