Polly Atkins examines the family justice system from the recent case of LS v PS in The Law Society Gazette

Polly’s article was published in The Law Society Gazette (page 26), 25 February 2022, and can be seen here.

Polly Atkins, Associate in our Family & Relationships department, explores the evolving role of third-party litigation funding in family law, particularly in financial remedy proceedings.

Once considered unusual, such funding is now a recognised tool to ensure fairness where one party lacks resources. However, the recent case of LS v PS [2021] EWHC 3508 (Fam) has highlighted tensions between the confidentiality of the Financial Dispute Resolution (FDR) process and the rights of litigation funders.

In this case, a funder known as Q sought to challenge a consent order, alleging the parties structured their settlement to avoid repaying a nearly £1 million debt. Q requested disclosure of privileged FDR materials to support a fraud claim, but Mrs Justice Roberts upheld the sanctity of FDR confidentiality, ruling the materials inadmissible.

This decision underscores the delicate balance between encouraging candid settlement discussions and protecting the interests of third-party funders. While funders are not parties to proceedings, they often exert influence through contractual terms and solicitor undertakings, allowing them to monitor and manage risk.

The case also serves as a cautionary tale for solicitors, reminding them to remain vigilant about potential conflicts and the obligations tied to litigation loans. Notably, Mrs Justice Roberts suggested that the Family Procedure Rules Committee might need to revisit the current rules to better accommodate the realities of litigation funding, hinting at possible future reforms to preserve funder confidence in the system.

Read the full article on the Law Society Gazette website [external link].