Litigation funding, champerty and the Code of 1771

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It’s official. Third-party litigation funding will not infringe the laws against champerty and maintenance and will not be contrary to the Code of 1771.

Last week, the Royal Court handed down judgment in the latest hearing in the proceedings brought by Barclays Wealth Trustees (Jersey) Ltd and Barclays Wealth Fund Managers (Jersey) Ltd as trustee and manager of R2R Funds against the former trustee and manager, Equity Trust (Jersey) Ltd and Equity Trust Services Ltd.

The judgment is of particular importance as this was the first challenge to a funding arrangement and the first time that the court has heard full argument on whether funding arrangements are contrary to the Jersey law of champerty (the earlier judgment in Re The Valetta Trust being a Beddoe application). It is also the first time that it has heard any argument at all on the ambit of the provision of the Code of 1771 that says ‘personne ne pourra contracter pour choses ou matières en litige’…

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