A new Code of Conduct for Litigation Funders was launched on 23 November 2011. It was facilitated by the Civil Justice Council (CJC) whose Working Group included Michael Napier, Senior Partner, Irwin Mitchell, representatives from the funding industry and PLC Dispute Resolution Consultation Board member Professor Rachael Mulheron.

The new Code sets out standards of practice and behaviour for litigation funders (previously referred to as third party funders) in England and Wales. Although the words "litigant" and "litigation funding" are used, the new Code does also apply to the funders of arbitration.

PLC Dispute Resolution attended the launch and heard Jackson LJ and Lord Neuberger, Master of the Rolls welcome the new Code. In his speech, Jackson LJ described it as "clear and straightforward" and said that it met the three concerns that he had identified in chapter 11 of his Civil Litigation Costs Review being:

(See further, Practice note, Jackson LJ's Review of Civil Litigation Costs: Final Report: Third party funding.)

He therefore considered that the publication of the Code marked the satisfactory implementation of his recommendation for a regime of voluntary regulation for litigation funding, provided that all reputable litigation funders were willing to join the Association of Litigation Funders (being set up along with the Code) and thereby sign up to the Code. He hoped that solicitors would tell clients only to enter litigation funding agreements which were in accordance with the new Code.

Some people, however, are asking for statutory rather than voluntary regulation. It was noted at the launch that, coincidentally, also on 23 November 2011, during the third reading of the Legal Aid Sentencing and Punishment of Offenders Bill, four Liberal Democrat peers had laid an amendment to the bill which would require funders to obtain a licence from a licensing body designated by the Lord Chancellor. Jackson LJ considered whether statutory regulation was necessary but concluded that a voluntary code would be more appropriate initially – subject to the specific points that have now been addressed – as stricter regulation would risk stifling a nascent industry.

Source: Judiciary