JONATHAN WOODHAMS, the executive director of LPF Group, New Zealand’s only locally owned and operated litigation funding entity, talks to Senior Lecturer Nikki Chamberlain about his work.

What do litigation funders do?

We fund litigation for plaintiffs to enhance access to justice. We assist plaintiffs in levelling the playing field by funding good claims, which provides access to the courts and an opportunity for plaintiffs to have their cases heard. Funders don’t guarantee a successful outcome in all cases but we do help people access the courts.

How did you get involved in this work?

I have a background in finance and law. But interestingly I have never practised in litigation. Phil Newland, who established LPF Group in 2009, contacted me in 2012 and said LPF might be a good fit for me. I knew little about litigation, case management or litigation funding at the time. However, I saw it as a good opportunity to help plaintiffs and hold defendants to account and change defendants’ behaviour using the courts. After graduation and before my time at LPF, I practised at Chapman Tripp, Russell McVeagh and Slaughter and May in the UK. I was in the commercial and banking teams before undertaking various roles in a non-law firm environment. I studied for a BCom/LLB at the University of Auckland from 1990 to 1994.

What does your job entail?

We look for a range of opportunities to fund such as complex commercial disputes, leaky-building claims, shareholder class actions and consumer affairs cases. It is intellectually challenging. My typical day involves dealing with company administration, considering new opportunities and managing existing cases LPF is funding. In relation to considering cases to fund, we are closely involved in case selection and helping with case management. At present we are funding eight cases and one – an abuse claim against Dilworth School – on a pro bono basis. We were approached by a number of survivors who had been talking to law firms about the potential of commencing litigation against Dilworth. They had been advised litigation is really hard and expensive and they were unlikely to get very much money in the end. We looked at it from a social justice point of view – Dilworth has used the system to defend itself through decades of cover-up. We couldn’t let it go. The legal team, including Rachael Reed kc and Wilson Harle, agreed to act on a pro bono basis and LPF agreed to meet costs that need to be done outside of legal fees. We are not charging a fee – this is a deserving case and we wanted to ensure a well-funded defendant isn’t using the legal system to prevent the plaintiffs from getting justice.

What do you look for when determining what to fund?

We look at the merits of the case, the character of the plaintiffs – are they credible, deserving and meritorious – the financial metrics of the case – how long it will take, its cost, its likely outcome if it goes all the way to the Supreme Court – and whether the defendants can financially meet any judgment against them. We often will get an independent lawyer to do a “black hat” review as part of this process. Then LPF’s investment committee will decide whether to go ahead. Litigation funding is a highly uncertain and risky endeavour. It is important to get the initial due diligence right. However, we also need flexibility as things often don’t turn out how you initially anticipated.

Can you give examples of types of cases you’ve funded?

Of the eight cases we are funding at the moment, there are two class actions, two liquidator claims, one body corporate claim, one relationship property claim and two general commercial disputes. Then there’s the pro bono claim against Dilworth School.

What are the benefits of litigation funding?

We help plaintiffs by providing both financial resources and case-management expertise. Often plaintiffs will say our case-management expertise is as important as the money we provide to fund the proceedings. Only if a case is successful do we get repaid the funds we have advanced and a fee for our investment.

Some think that litigation funding can be punitive – what is your response?

Without LPF most plaintiffs we fund have no prospect of recovery whatsoever. There are many benefits from litigation funding of which providing access to justice and obtaining money for plaintiffs is only one. It is also a mechanism to hold wrongdoers to account and to help provide clarity and develop the law. Plaintiffs can choose whether to use our services or fund themselves. Both parties enter into an agreement for funding with uncertain timeframes. Often the actions of defendants and insurers drive up costs. In this respect both parties make assessments of time, costs and risks at the outset when the funding terms are agreed. The bargain struck in many cases is what the parties contracted for and is within the parameters of what they thought the outcome would be. Regarding whether funding is punitive on defendants, I have not heard of a “greenmail” proceeding – in which an action without merit is filed solely to shake down a settlement – being brought in New Zealand with the assistance of funding. If defendants put as much time and care into ensuring they were not breaching their obligations as they do in defending cases plaintiffs would often not need to resort to the courts.

Do you think it is problematic that litigation funding is not regulated in New Zealand?

The elephant in the room is the cost and time litigation takes, not whether there is regulation. The system favours defendants who want to use delay and costs to prevent plaintiffs from obtaining justice. Our business is risk mitigation – so not knowing what the rules are or uncertainty around the rules adds time and costs. We support regulation that provides certainty for plaintiffs to access litigation funding, not reducing the amount of funding that is available and thereby effectively reducing access to the courts. We have the advantage of looking at what has worked in other jurisdictions and what can be done better.

What is the most useful part of your Auckland Law School degree as a litigation funder?

What I enjoyed the most was engaging with people from different backgrounds at Law School and in the Business School. What has been most useful for me are the skills I acquired to think laterally and problem-solve – take a set of facts and a new problem and apply the law. My favourite paper at Law School was medico-legal law taught by Ron Paterson. It was an interesting class although I’ve not used it since. When I entered Law School I thought I would eventually work for an accounting firm or banking practice, but I didn’t think I would be practising as a lawyer. I then got swept up with the magic of Chapman Tripp and its Summer Clerk programme.

What career achievement are you most proud of?

We have achieved outcomes for plaintiffs who without our help would have got nothing. Our clients have ranged from mum-and-dad investors who lost money in a failed investment scheme to kiwifruit growers seeking to get the Ministry for Primary Industries to improve standards after the devastation of PSA in the 2010s. That keeps me coming to work each day. Positive changes are made on the back of these cases in addition to providing plaintiffs with compensation.

What would you advise those interested in a career in litigation funding?

Ask questions – and be prepared to challenge the status quo. Don’t accept the way you are told it’s done as being the only way or that you can’t do things better.