This week lawyers are delivering their closing arguments in the UK’s biggest ever class action lawsuit relating to a dam disaster in Brazil. The victims deserve justice, but the predatory business model of their funders does not inspire confidence, says Mark Hollingsworth

Litigation is risky, expensive and stressful. Just ask the 555 beleaguered subpostmasters whose lives were destroyed after being wrongfully accused of theft and fraud based on a catastrophically faulty IT system. In 2019 they sued the Post Office in the High Court and it should have been a victory which vindicated their case, restored their integrity and compensated them for huge financial losses. But it was a bitter-sweet triumph. The subpostmasters succeeded, and the humiliated post office agreed to pay them £58m. They were ecstatic but then came the devastating news. Their lawyers’ share was a staggering £46m and so the 555 plaintiffs only received £12m. This meant each subpostmaster only received on average £21,600 each – a pittance and not remotely close to what they deserved, given the suffering and hardship they had endured.

A major reason for this injustice was the subpostmasters’ use of a litigation funder rather than a firm of solicitors. On the surface a third-party funder is good news for the ordinary citizen who cannot afford expensive lawyers. They cover the high cost of the legal proceedings on behalf of companies and thousands of claimants. But these backers take a huge slice of the financial award and compensation – 80 per cent in the Post Office case. And so there is a growing unease about their activities and whether they deliver........

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