IN CONVERSATION WITH ROSEMARY IOANNOU 33
KE I TH That leads us on to the trends you see developing in funding. What are themain things to look out for? ROSEMARY I think there is going to be a lot of discussion about increased regulation. I think there is going to be a push in different regions to encourage funding to ensure that each regionmaintains its pre-eminence in the global disputesmarket. I believe firms and institutions are going to be very cognisant about it andwe are going to see a lot of discussion around that in the coming years. I also think that there is going to be exploration of the different ways inwhich funders’ money can be put to best use for individual clients, not just on an individual case funding basis, but looking at the range of disputes clients are facedwith. I think that is going to be an exciting development over the coming years. KE I TH What effect do you think the knowledge of funding has on the ultimate resolution of the case in terms of settlement? ROSEMARY Before I talk about that I need to address current perceptions. There is amisconception among the legal community and our clients that if the funder becomes involved in a case, theywill try to take over control of the case from the client and direct the law firm. That is simply not true. Because of the English rules inmaintenance and champerty, and because we are amember of ALF, professional funders like Vannin cannot seek to control the case. The case remains the client’s. They are the client of the law firmand they are the entity or individual giving instructions to the law firmas to the strategy and direction of the case. T HE IMPA C T OF F UND ING ON A RB I T R AT I ON
ROSEMARY Saying that, I have had direct experience of knowledge of funding having a direct impact on the settlement achieved. This is for two reasons: The first is that often it’s a well-known strategy of respondents to beat claimants into submission by throwing the kitchen sink at themand using up all their resources, such that they no longer have the financial wherewithal to continue with the claim. If a respondent knows the claimant is funded and as such they have awar chest to fight the claim, that strategy does not work. This in turn forces the respondent to think a little bit longer and little bit harder as to whether settlement is therefore the better option. The second point to bear inmind is that, where a case is funded, we go through a very rigorous due diligence and review process. We do that ourselves internally, but we will also always obtain an external legal opinion verifying our views as to the prospects of success of the case. We require that external legal opinion to give the case a 60% or more chance of success. If the defendant knows the case is funded, and they know it’s a professional funder like Vanninwho has been through that rigorous process, they are also going to know that not only does the claimant think it is ameritorious but also an independent third-party and an expert they have instructed who agrees with them. It is amazing the pressure that can put on the defendant to come to the settlement table sooner than they otherwise would have. KE I TH What are your views on disclosure of the fact of funding? ROSEMARY In the context of litigation, that question often arises strategically: is it a good idea?We normally say ‘yes’ for the reasons I mentioned earlier about settlement and broader reasons we’ve just discussed. We have no problemwith the claimant disclosing who we are and that we are funding. It is their choice whether they do or not, but as a general rule, we encourage them to do so. In the arbitration community, there is a lively ongoing debate as to whether disclosure of funding and and the funder should bemade obligatory in every case. This is a hot topic because of the potential conflicts of interest for arbitrators. In this context, we think transparency is key. Disclosing the fact of funding and who is funding at the outset enables the arbitrator to comply with his or her obligations in regard to conflict of interest and gives everybody a clean slate at the outset of the arbitration.
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