Jersey: Recent Developments In The Funding Of Litigation In Jersey


There have been significant developments in the United Kingdom during the past two decades in the funding of commercial litigation. Some, although not all, of these developments have also impacted on the Jersey commercial litigation market.

In England and Wales, the principal developments of recent years are in the introduction of both lawyer funded litigation and third party funded litigation and the expansion of the insurance funded market. So, whilst clients can still fund their litigation via the traditional method (being fully responsible for their lawyer's costs whatever the result), there is now greater choice for plaintiffs.

Lawyer funded litigation in England and Wales

So far as lawyer funded litigation is concerned, conditional fee agreements are now very well established. Broadly these are agreements between a lawyer and a client which entitle the lawyer to apply an uplift (capped at 100%) to standard fees as charged in the case of a successful outcome. Damages based agreements (which were introduced into England and Wales in April 2013) allows the lawyer to charge a percentage of the damages in the case of a successful outcome. This is capped at 50% of the damages for commercial litigation. In either case, these agreements in their simplest form are on a "no win no fee'' basis. Accordingly, whilst the plaintiff's lawyer has funded the matter for free in the case is lost, he has the opportunity to earn a success fee where the case is successful. To cover off the potential risk of adverse costs if the plaintiff loses, the latter might purchase After the Event (''ATE'') insurance cover.

Until April 2013 the successful plaintiff in England was able to seek to recover the "uplift" (as well as the basic costs) from the unsuccessful defendant and the ATE premium. The balance was restored back in favour of defendants in April 2013 such that, save for in limited cases, both the uplift and the ATE premium (if any) is now paid for by the successful plaintiff from its damages. The most significant exception to this change relates to actions brought by liquidators and in relation to such actions, the pre April 2013 position still remains (although whether this is a permanent exception is in doubt). This is designed to encourage liquidators to pursue claims against third parties including directors for the benefit of the insolvent estates, such action being deemed to be in the public interest.

Third party funded litigation

Third party litigation funding involves (principally) an agreement between the plaintiff and the third party funder to share of the spoils of successful litigation. The plaintiff's lawyer is generally a party to that agreement in order to bind the lawyer into certain obligations towards the funder. There is no set format for third party funding agreements, save that the success fee is likely to be calculated as a multiple of the funders' investment or as a percentage of the damages or whichever is the higher of the two. The funder will carry out a detailed assessment of the merits of the case and will generally investigate the solvency of the proposed defendant and there are strict limits on the extent to which the funder can "control" the litigation. This includes in relation to any settlement, the decision for which lies with the plaintiff and not the funder, although it is usual for the funding agreement to contain a clause that the plaintiff must take and rely on legal advice when settling. If third party funded claims are unsuccessful then in normal circumstances the funder has no recourse to the plaintiff for the funding expended; both the plaintiff and the funder are at risk as to the defendant's costs and there are established rules relating to the limit of the funder's liability in this regard. Funders will often purchase ATE insurance cover, or write their own adverse costs insurance.

Insurer funded litigation

There is also an established market in England for ''Before the Event (''BTE'') insurance. Unlike ATE insurance, which is purchased by reference to specific litigation which has been or is about to be commenced, BTE cover is purchased like traditional insurance policies and is often (in the case of individuals) an adjunct to an annual motor or household policy. The UK Government and the Review of Civil Litigation Costs authored by Lord Justice Jackson both urge a greater take-up of BTE cover particularly for individuals and SMEs.

The funding of litigation in Jersey

So far as the position in Jersey is concerned, lawyer funded litigation of the sort described above is not available in Jersey. As for third party litigation funding, this is a relatively new (and important) arrival to the Island.

In 2011, Bedell Cristin issued proceedings on behalf of individual beneficiaries and a new trustee of a Trust alleging fraudulent breach of trust by the former trustee and dishonest assistance by a number of parties. The only material asset of the Trust had been a minority shareholding in a company which in turn owned certain rights to a pharmaceutical product. The former trustee had sold the shares to itself as trustee of another trust which also held shares in the same underlying company. The other trust was for the benefit of the family of one of the co-investors involved in developing the product. The sale proceeds received by the Trust were subsequently distributed to the beneficiaries and the trust had been dormant for some years before Bedell Cristin was approached by the aggrieved principal beneficiary, who claimed that the sale had been at a gross undervalue.

The proceedings were ultimately funded by Harbour Litigation Investment Fund LP ("Harbour") based in England. However, prior to the issue of proceedings, the proposed plaintiffs (being the aggrieved beneficiary and his daughter plus the replacement trustee) applied to the Royal Court to seek guidance as to whether the agreement with Harbour was permissible and enforceable under Jersey law (surprisingly, a novel point in Jersey in 2011). In its judgment (see Re the Valetta Trust [2012] (1) JLR 1) the Royal Court stated that there was no material difference between the law of Jersey and the law of England in this area and decided that public policy considerations strongly pointed towards the agreement being held as valid and enforceable. However, the Court made it clear that whether a particular agreement is valid and enforceable, as opposed to an abuse of process, depends on the circumstances of each case and the terms of the agreement. The Court noted that, whilst the funding agreement undoubtedly provided Harbour with a share of the proceeds, it was calculated to ensure compliance with the principles derived from the English and Australian cases and could not be said in any way to corrupt the purity of justice. The control of the proceedings remained with the plaintiffs who would still retain a substantial proportion of the damages if successful and the defendants for their part were protected in respect of their costs, if the claim failed. Furthermore, the agreement facilitated access to justice by plaintiffs who would not otherwise have been able to afford to bring the litigation in question. For these reasons, the Court authorised the trustee to become party to the funding agreement.

In concluding, the Royal Court emphasised that its judgment was only applicable to third party funding agreements. The public policy requirement that officers of the Royal Court should be inhibited from putting themselves in a position where their own interests could conflict with their duties to the court remains otherwise in force, which means that contingent fee agreements and damages based agreements remain prohibited in this jurisdiction. In Jersey, no statutory relaxation of this principle has been introduced and in the Royal Court's judgment, the principle remains in full vigour.

This case was followed in the case of Barclays Wealth Trustees (Jersey) Limited and another -v- Equity Trust (Jersey) Limited [2013] JRC 094 in which a funding agreement was endorsed by the Court notwithstanding that it was entered after the commencement of the litigation in question.

Another interesting development relates to the funding of claims by beneficiaries against their trustee. In the Matter of X Trust [ 2012] JRC 171 involved principal beneficiaries of a Jersey law discretionary trust seeking a direction to allow them to fund a breach of trust claim against the trustee and others (for the ultimate benefit of the trust fund, if successful) by using the assets of the trust fund. The trustee had previously made distributions from the trust fund to enable the beneficiaries to fund the hostile proceedings without reference to the Royal Court, but considered that this was no longer appropriate, as the trust could be prejudiced by the continuance of the proceedings. The beneficiaries claimed that they had no alternative source of funding, and made the point that their action was akin to a derivative action, in that if they were successful, the defendants would be required to replenish the trust fund rather than to pay the beneficiaries. The trustee was convened to the application but remained neutral. The Royal Court concluded that it was right to make the order sought. Relevant factors in arriving at this decision were as follows:

  • The beneficiaries produced counsel's opinions which indicated that their claims were well-founded in principle.
  • The hostile proceedings were very much akin to a derivative action.
  • The indications were that, unless the court made the order sought, there was a reasonable possibility that the litigation would have to be discontinued. As counsel had confirmed that the claim was a proper one, the Deputy Bailiff did not consider that discontinuing the litigation would be in the interests of the beneficiaries as a whole.
  • As the beneficiaries bringing the hostile proceedings would be the main beneficiaries of the trust, the risk of litigation would be borne by the right parties if the trust carried the expense of the proceedings.


Third party litigation funding is an important recent development in Jersey, all the more so since lawyer funded agreements, allowing lawyers some form of success fee if litigation is successful, are not currently enforceable. As can be seen from the In the Matter of X Trust [2012] JRC 171 judgment, there may well be an alternative to third party funding in certain cases involving beneficiaries bringing proceedings against their trustee for breach of trust.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.