Litigation funding empowers UK shareholders

Author: Lizzie Meager | Published: 27 Jun 2017

Increasing levels of US-style litigation in the UK are changing the dynamic between companies and stakeholders.

This is being driven by a combination of external factors: better shareholder engagement, new legislation, and the increased presence of US market participants in UK markets.

The High Court has seen cases brought against banks increase by a third

Another factor is the growing availability of third-party litigation funding (TPLF). The ongoing search for yield has seen fund managers turning to TPLF for, in some instances, major returns.

At a time when shareholder activism is already on the rise, this new dynamic is in turn shaking up the relationship between shareholders or creditors and the companies they invest in, at times disrupting the process.

“There’s no question that the UK is becoming a more litigious jurisdiction – much more like the US,” said Greg Campbell, partner at Gibson Dunn & Crutcher in London. “And litigation...