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Ethical worries over third-party funding "evaporating"

Concerns that third-party funding would spark a rush of vexatious litigation are fading, a survey of lawyers and businesses on both sides of the Atlantic suggests.

Researchers found that worries about finance schemes leading to “unnecessary litigation” were prevalent in 10 percent of business respondents – down from more than 80 per cent five years ago.

The survey, which also covered businesses and lawyers in Australia as well as in the UK and US, found that 60 percent said their use of third-party funding had increased over the last two years. Use of funding schemes in the US has increased four-fold since 2013.

The survey was commissioned by one of the prominent third-party funders, Burford Capital. However, the lender said that the survey was conducted and analysed by independent researchers.

Ethical concerns over the funding model, which continue to be raised by some in the UK, are evaporating, according to the survey. Just 9 percent raised issues around champerty and other ethical issues, claimed the researchers, putting that category at the bottom of the pile of potential obstacles businesses cited against using third-party funding.