It is well established that, where a third party funds litigation in return for a share of the proceeds, the funder is potentially liable for adverse costs if the claim fails. That liability is generally thought to be subject to the “Arkin cap”, deriving from the Court of Appeal’s decision in Arkin v Borchard  1 WLR 3055, which limited the funder’s liability for adverse costs to the amount of the funding provided. A recent decision has, however, questioned the application of the Arkin cap, particularly where the funder is funding the whole of the costs of the litigation: Bailey v GlaxoSmithkline  EWHC 3195 (QB).
Maura McIntosh has published a post on Practical Law’s Dispute Resolution blog which considers the scope and application of the Arkin cap in light of the recent case law. Click here to read the post (or here for the Practical Law Dispute Resolution blog homepage).