Insurance for litigation funders

The decision of the Scottish Court of Session in Quantum Claims Compensation Specialists Ltd v Wren Insurance Services [2011] ScotCS CSOH_61 is of interest as it is one of very few reported decisions on the terms of cover obtained by organisations which fund litigation. The case shows that if the insurers are not kept informed of significant developments in the litigation, including the addition of new defendants facing entirely different claims, there may be no cover under the policy.

Quantum: the insurance arrangements

The business of the assured, Quantum, was to fund and manage civil litigation. On behalf of its clients, Quantum instructed lawyers and received payment for its services in the form of a proportion of the damages awarded to the clients. For its part Quantum agreed to indemnify clients against adverse costs orders in the event that the claims were not successful.