How to address the regulation of third-party litigation funding of class actions?

Class actions are controversial because they impose high transaction costs on class member remediation, and are often driven by overtly entrepreneurial lawyer and third-party litigation funder (TPLF) teams. There is a view that unless checked, these teams may advance interests that diverge from those of class members. Indeed, the potential for conflicts of interest between funders, lawyers and litigants more generally has led to the announcement of a review of the litigation funding sector by the Civil Justice Council (CJC), which, among other things, will consider whether, and how, and by whom TPLF should be regulated. While the CJC review is not confined to the funding of class actions, due to the attenuated nature of class member involvement in class proceedings, conflicts of interest in this area of practice can be more complex than in the traditional tripartite funder-lawyer-party setting, and thus arguably warrant particular attention from the CJC. To help inform the CJC's inquiry, this article therefore explores whether special consideration of class action TPLF is required and the regulatory options that might be available.