Law360, London: Litigation-funders are grappling with an apparent existential crisis amid uncertain macroeconomic conditions and regulatory pressures in the UK, compelling some to revamp their business models in pursuit of fresh capital for investment in cases.

Dispute Resolution analysis: The Competition Appeal Tribunal has held that a revised Litigation Funding Agreement (LFA) was not unenforceable as a damages based agreement (DBA). While it contained language permitting the funder’s fee to be calculated by reference to any proceeds, that provision was contingent on any such arrangement being legal and enforceable (which it was not, post-PACCAR). Until that point, the Tribunal was satisfied that the funder’s fee fell to be calculated without reference to any proceeds. Written by Emily Lodge, associate at Quinn Emanuel Urquhart & Sullivan UK LLP.

This Practice Note covers funding Scottish civil litigation under the Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (CL(EGP)(S)A 2018). For guidance on: • judicial expenses and taxation in Scotland, see Practice Note: Judicial expenses and taxation in Scottish civil litigation • group proceedings in Scotland, see Practice Notes: Group procedure in Scottish civil litigation—authorisation and permission and Group procedure in Scottish civil litigation—procedure after permission granted • the closest equivalent provisions applicable in England and Wales, see: Funding arrangements—overview which, in turn, links through to detailed guidance on various aspects, including Practice Notes for further guidance on LASPO: Recovery of costs insurance premiums, Damages-based agreements (DBAs) and Conditional fee agreements—success fees Key: • CL(EGP)(S)A 2018—Civil Litigation (Expenses and Group Proceedings) (Scotland) Act 2018 (sometimes referred to as the ‘Civil Litigation, etc Act 2018’) • CR(S)A 2014—Courts Reform (Scotland) Act 2014 • RCS—Rules of the Court of Session 1994 • Taylor Review—Review of Expenses and Funding of Civil Litigation in Scotland Background to and implementation of CL(EGP)(S)A 2018 In September 2009,

Funding options When setting up a joint venture (JV), the parties will need to consider how the JV is to be funded, both initially and throughout the course of the joint venture. Although this note highlights the main funding issues faced by corporate JVs, the general principles apply across all JV structures. The choice of funding methods may depend on: • the commercial objectives of the parties • the relative resources of the parties • whether the parties wish to and are able to fund the JV themselves or whether external funding will be required, and • tax considerations A joint venture company (JVC) will typically be funded (initially and subsequently) by some combination of the following methods: The joint venture agreement (JVA) should set out details of how the initial and future funding requirements of the JV will be met. Initial funding by the parties The parties themselves will usually provide a significant proportion of the initial funding for a JVC through a combination of: • equity—cash or non-cash assets provided in return

An agreement between a funder and the employer to advance finance in relation to a construction project.

This Practice Note covers the following issues in relation to the funding of an employee benefit trust (EBT): • practical aspects of funding an EBT • financial assistance—the background • financial assistance—overview of prohibition • relevance of financial assistance to EBTs • financial assistance—exemptions • the employees’ share scheme exemption • consequences of non-compliance with the financial assistance provisions • tax implications for close companies which fund EBTs, and • corporation tax relief in respect of EBT funding Practical aspects of funding an EBT When an EBT is first set up, it needs to be provided with initial financing, as a trust cannot exist without initial trust assets. It is common for a nominal amount, for example £100, to be settled on the trustee in order to establish the EBT (for further details, see Practice Note: Setting up an EBT). However, after the EBT has been established, other funding can be provided. This may be by way of: • voluntary contribution • loan finance from the company or from a third party such as a bank (usually guaranteed by

What options are available when deciding how to fund litigation? Litigation funding in its widest sense simply means exploring all options to fund the various costs of litigating a matter to trial, enforcement and final recovery. Those options can include one or more of the following: • the litigating IP can pay some or all of the costs on a usual private client basis, ie paying the costs from funds available in the insolvent estate (if there are any) as those costs are incurred • solicitors can be engaged on a conditional fee agreement (CFA) or damages-based agreement (DBA) basis, or with part of their costs accrued on that basis and part paid as the costs are incurred • counsel can be engaged on a CFA or DBA basis, or with part of their costs accrued on that basis and part paid as the costs are incurred • after-the-event (ATE) insurance cover, to pay any adverse costs award in the event of the case being lost, can

An arrangement made by a litigant which gives rise to an additional liability.

ARCHIVED: This Practice Note is archived and is for historical purposes only. The underlying legislation dealing with the changes to the funding arrangements are set out in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO 2012) with consequential changes in the Courts and Legal Services Act 1990 (CLSA 1990). Changes The changes in relation to funding arrangements are set out in: • conditional fee agreements (CFAs): ◦ LASPO 2012, s 44 deals with success fees in CFAs, and sets out the conditions required for a valid CFA with a success fee and provides that success fees will no longer be recoverable from the unsuccessful party. The relevant provision for that is s 44(4), which provides: 'A costs order made in proceedings may not include provision requiring the payment by one party of all or part of a success fee payable by another party under a conditional fee agreement' ◦ the Conditional Fee Agreements Order SI 2013/689 sets out the transitional arrangements for success fees in CFAs where the CFA was

ARCHIVED: This Practice Note has been archived. This Practice Note sets out the regulatory requirements under the SRA Code of Conduct that was in force between 6 October 2012 and 24 November 2019. These provisions will apply to any funding agreement entered into between those dates. In 2011, the Solicitors Regulation Authority adopted a regime change in relation to its regulation of the industry. As part of this, a new Code of Conduct was introduced with effect from 6 October 2011. There are ten principles and a set of mandatory outcomes ie standards of behaviour which solicitors must meet. In order to achieve those mandatory outcomes the 2011 Code provides a non-exhaustive list of behaviours which are 'indicative' as showing whether or not the required outcomes will be achieved. The mandatory outcomes relating to funding and costs are contained in the '1st Section: You and your client Chapter 1: Client case'. Of the sixteen mandatory outcomes set out in the 2011 Code, Outcome O(1.6) is of most relevance in relation to Conditional Fee Agreements

Unlike maintained schools, academies and free schools are funded directly by the Department for Education (DfE) and not by or via the local authority for the area in which they are situated. The central government funding is administered on behalf of the DfE by the Education and Skills Funding Agency (ESFA). Note: there are no academies in Wales. Although the Academies Act 2010 (AcA 2010) does apply in Wales, the provisions for the creation and funding of new academies apply only in England. Sources of funding for an academy or free school Funding for an academy or a free school comes mostly from the general annual grant (GAG) and the earmarked annual grant (EAG), but it may come from other sources too: • grants from the DfE towards the school promoter’s application and setting-up costs • capital expenditure funding from the DfE, as agreed in the DfE’s funding agreement • GAG for recurrent expenditure, again as agreed in the DfE’s funding agreement

Sources of funds Practitioners should advise the personal representatives (PRs) to make arrangements for funding inheritance tax (IHT) early so that funds are available as soon as possible, ideally within six months from the end of the month in which the deceased died (when interest would start to run) or in any case by the time the grant application is ready to be lodged. There are several methods for paying the IHT due on the deceased’s estate, including: • assets not vesting in the PRs, such as insurance or pension proceeds (although note that the forthcoming changes to IHT liability on pension scheme benefits on death may affect the amount due to beneficiaries and delay them in accessing these proceeds soon after death) • assets not requiring a grant • from the deceased's bank or building society account or other qualifying investment by the direct payment scheme (DPS) using Form IHT423 or otherwise by agreement with the relevant institution (on a case-by-case basis) • from the deceased's National Savings & Investments account also by the DPS using Form IHT423 or otherwise • from