Legal Finance Expert speaks to the practitioners who shaped litigation funding from the inside. When the question came up of who to interview next, one name surfaced first.
Stephen Hunt is a renown insolvency practitioner known for complex and contentious work. His provisional liquidator appointments in the late 1990s shaped both the law and the conventions of that area. He has since led significant cross-border tracing actions and acted in claims for breach of duty and breach of trust. Notable cases include the landmark 1996 Landau pensions case, 2009 Clydesdale v Smailes (the replacement of administrator), and the recent high-profile 2025 Qualia Care case. He sits on the panel of Proceeds of Crime Act receivers and was, at one point, Chairman of West Ham United Women F.C.
Hunt is, above all, a maverick. He rebuilt a firm after tragedy, taught himself insolvency, funds his own litigation, and has pointed views on what funders should be doing better.
We sat down to discuss the evolution of his litigation finance and insolvency work. Our paths first crossed many years ago, long enough, as Stephen puts it, not to dwell on the exact date.
Take us to the start. What drew you to insolvency, and how did you end up at Griffins on the contentious side rather than restructuring?
I had a lot of jobs before I was 22. The low point was selling gold out of a briefcase on Oxford Street, but that is a story for another day. I started at Barclays International and ended up in banking in the Docklands before moving into insolvency.
A friend at the bank had applied for a job at Griffins, working the insolvency desk filling in proxies. He went for the interview in 1991. Tim Griffin did not take to him, but he came back and said I should try. I went, Tim asked why I wanted to work in insolvency, and I told him honestly: I had no idea what insolvency was but my friend said that I would be good at it. He gave me the job.
When I was younger, I was arrogant. I have mellowed since, but in my twenties I would try anything. That was my skill set.
Was there a single moment early on that decided the direction of your practice? Who were the practitioners you watched and learned from in the late 1990s?
The most formative period was my first two years as a case administrator. Griffin and Partners was six or seven people at the time. Tim was a partner, the other partner virtually retired, his wife worked as a PA. We operated out of a basement office in Pimlico.
I went on holiday and came back to find a letter on my doorstep from the firm. Tim and Liz had been killed crossing the road. Overnight, our one-man band had no boss. The semi-retired partner returned full-time, and Matthew Tait, now a partner at BDO, and I were suddenly the most experienced people in the firm, with two years under our belts.
Matthew and I effectively ran the firm. We split it front of house and back of house. Matthew was polished and articulate, so he took the front. I inherited 300 dusty files and worked through them, teaching myself insolvency.
One of those files was the Landau case Matthew had been handling. It involved a bankrupt solicitor and his pension. The pension company wrote asking whether they could pay it out to him. I remember thinking, that is an interesting question. Why are you asking me? Surely the answer is binary, either he gets it or he does not.
I pulled every textbook I could find onto my desk. The authorities were split. Half said a bankrupt keeps their pension, the other half said it passes to creditors. There was no certainty, which I found compelling. It sparked my appetite.
I instructed a conservative solicitor and an equally cautious barrister, and we went to court to clarify the law. That became the Ivan Landau case in December 1996. The decision affected hundreds of thousands of people. Many lost their pensions. It made headlines, brought a wave of questions, and, for me, marked the beginning of a real appetite for litigation. It was the moment I understood how litigation can reshape a market, and even an economy.
What did the market look like for a younger IP wanting to do that sort of work back then? Were you unique, or were there a lot of you around?
I was not an IP at the time, so I was doing all of this in my boss’s name. To their credit, they either trusted me completely or did not ask too many questions. They signed what I put in front of them. As you get older, you learn not to let your own staff do the same. It was a particular moment in time.
I was self-taught. When I joined insolvency, people above me were still lamenting the loss of the Bankruptcy Act 1914, despite the Insolvency Act 1986 having been in place for years. We were unremarkable and largely unknown, so I kept my head down, read the legislation, and made the applications I thought were right. I have always had a contrarian streak, questioning established approaches and often doing the opposite.
This was before CFAs and the wider shift in litigation funding. Bringing claims was not straightforward, but I pursued them anyway, including a case against an insolvency practitioner in the mid-90s, when almost no one was doing that. Being in a small firm gave me the freedom to test ideas. In a larger organisation, I likely would not have had it.
Turning to provisional liquidation, you began taking those appointments somewhat later, presumably after you became an IP?
It was long before I became an IP. My first provisional liquidation was early 1996. I remember it vividly because it coincided with the Dunblane massacre. I was in a taxi when the news broke.
I was attending a creditors’ meeting for a CVL on behalf of a shareholder. I filibustered for about eight hours, blocked the process, and bought time to dig into the detail. It involved an estate agency, and in the end, I prevented the insolvency.
Afterwards, in the pub, I flicked through the legislation, found the sections on provisional liquidation, and said, this looks like a good idea. Everyone agreed. The next day I went to court, handwrote a petition and application, and appeared before the Registrar to have my boss appointed. My argument was simple: what harm can it do? I was bluffing my way through a process I did not fully understand.
It worked. We took control, uncovered a fraud, and returned the company to solvency within six weeks. The following year, I applied the same approach on another matter, this time bringing in HMRC. That led to my introduction to Nick Oliver at Moon Beever and, from there, much larger work. That one handwritten application changed everything. I became the most experienced person in the room because I was the only one who had done it. In those situations, the one-eyed man is king.
Let us move to litigation funding, where you and I first met. What was the first time you actually used funding?
My first experience of a funder was being sued by one. Kevin Hellard and I, at Grant Thornton, were appointed as replacement insolvency practitioners on a case where the directors were pursuing HMRC to recover VAT. The allegation centred on a carousel fraud, and the claim had been funded.
An application was made to remove us on the basis that we were biased in favour of HMRC, which we found rather bemusing. The allegations were dropped, and we said, in effect, do as you wish. These are court appointments and can be changed relatively easily. The claim was ultimately unsuccessful. That was my first real exposure to litigation funding, not as a user, but as someone being challenged by it.
Around the same time, I heard Steve Cooklin speak about Manolete Partners and the Hastings Pier case at an R3 event. It was a real eye-opener. When I was introduced to give my speech, I set aside my prepared remarks and spoke about litigation funding, focusing on the duties of an insolvency practitioner and how, in ten or fifteen years, it would become a significant part of the landscape. That marked my first real engagement with the area, not by using it, but by thinking through its implications.
The first generation of funders were largely unknown to the IP profession. How did trust develop, and where did funders earn it or lose it in those early years?
It got worse before it got better. One case involved a company in liquidation with funding already in place, a claim against a bank. The Official Receiver had entered the agreement, and when I was appointed as IP, I inherited both the litigation and the funding.
The case collapsed at disclosure when the bank produced documents showing the directors had followed the procedures they claimed had not happened. The funder withdrew, the lawyers stepped away, and I was left exposed at the consequential hearing. We regrouped and turned to the insurer, but indemnity costs followed, leaving us dealing with the fallout from a claim we had not originated. It was a difficult position and a valuable lesson in risk and responsibility.
I later engaged litigation funders myself, with mixed results. Some cases succeeded, others did not, including one where funding and insurance were insufficient and I had to fight my way out. Not every case goes as expected. We even lost one that felt unlosable. That is litigation. The key lesson is always to ask: what happens if we lose, and are the risks properly covered? The 2010s were a mixed experience. It is not easy money, and it is a challenging market.
From a funder’s perspective, you seemed to be building your own war chest and didn’t really need external capital. You were running cases through Griffins’ balance sheet, often where no commercial funder would step in. What drove that approach? Was it a belief you could assess risk better from the inside, or that the economics made more sense to go it alone?
I have always had an appetite for controlled risk. If you can control it, you can manage it, which is why I have invested in my own firm rather than shares.
I focus on price, return, risk, conflict and duty. We do not have a formal risk committee. I am the risk committee. With a background in CFA work, litigation funding became another option, assessed case by case. You cannot predict the future. The key is what level of risk suits the balance sheet. External perspectives matter, as funders and lawyers can influence how cases are run.
I act for the estate. If a funder makes more than we do but delivers the right outcome, that is fine. We funded cases where it made sense, using capital from CFA wins. Most IPs fund cases to some extent. We just did it at scale. We lost some, which is always instructive. Over time, you get comfortable with risk. As long as it made sense for the estate, the focus stayed on the outcome. Even now, we take unconventional approaches to deliver significant recoveries. It is horses for courses.
Walk me through your process when a case comes in. The need for funding develops over time rather than being immediate, so where do you start? What are you testing for, and how long does it take to reach a decision?
During lockdown, we changed our systems significantly. Just before COVID, I had started interviewing litigation funders because we were asking ourselves a fundamental question: what is the true price of risk?
I spoke about this at our annual conference in June 2019. I posed a simple question: if lawyers could achieve a 200% or 300% uplift, would they take on more CFA work? The answer was an overwhelming no. Lawyers do not tend to price risk in that way. To them, risk is risk. Increasing the return does not change their appetite. I found that fascinating.
It reminds me that most lawyers are poor at assessing risk. Having spent twenty years in litigation finance, you learn to think differently. Lawyers are trained to push risk onto their client, whereas funders absorb it.
Having understood where lawyers sit on risk, I wanted to see where funders sat. So I spoke to a number of them and asked what tools or systems they use to assess risk and manage cases. My conclusion was that most funders are essentially a mix of lawyers, a salesperson, an Excel model, and capital. There was not a particularly sophisticated or consistent framework, which, while blunt, was my impression. It highlighted the need for more structured decision-making, combining experience with proper economic analysis.
From an IP’s perspective, it comes back to first principles. Under SIP 1, you investigate, and if something looks viable, you investigate further. You are not just taking on a claim, you are taking on an entire insolvency. That is different from lawyers or funders, who assess a single case. As an IP, the decision evolves. On day one, you do not necessarily need funding. You work through the options: can the claim be strengthened, settled early, or pursued without external funding? Funding is only the answer once those have been properly assessed. That is what we have tried to build into our systems over the past six years.
Is there a single biggest waste of time in the current funding process from your perspective?
Insert sound effect of me opening a big book with a long list. I would not think of it in those terms. I see funders as selling a product. I understand what that is, and I also understand the gap that can exist between what is sold and the reality.
I remember a pitch from a small funder who reviewed our cases and admitted I was not their typical client. I respected the honesty, and there is truth in that. There is a risk that litigation funding is seen as a last resort, or simply an expensive way of financing a claim. The question is always why not fund it directly or borrow instead.
That said, I understand both the strengths and limitations of the model. I would not change it fundamentally, but I would like to see more innovation, particularly around insurance and risk-sharing. As it stands, we know what funders do, so we approach it pragmatically, based on what works for the case.
Across family office-backed, listed, private equity-backed and GP/LP funders, is there a meaningful difference in practice?
The biggest difference I have seen is between a solvent funder and an insolvent one. That makes a real difference. If a funder spends the entire case panicking, pushing for settlement and second-guessing decisions, that is the biggest issue. It is not about size. It is about whether they can deploy capital calmly and see it through.
The best funders, large or small, are the ones you do not hear from. If they become a constant presence, it raises a simple question: are they running out of money? Trust is critical. Everyone is incentivised to get the right outcome, and constant interference undermines that.
Where the funder, lawyers and estate are all genuinely at risk, interests are aligned. But if the structure cannot hold, you end up settling for less than you should. ATE insurers tend to behave differently. They are generally calm and only step in when needed. So when one party is constantly checking while another stays quiet, as the client, you draw your own conclusions.
Assuming a case is successful, I would choose between funders based on how they behave post-transaction. If the terms are broadly similar, the question becomes: do I want that level of noise in my ear? It is also important to keep some balance. In any industry, if you ask people, they will give you a long list of grievances. Insolvency practitioners will have their views on funders, but funders would say, quite rightly, that they can never get lawyers to stick to a budget. That is a constant issue.
Coming back to costs.
Whether I am using funding, a CFA, or funding a case myself, it is still my responsibility to control costs. It should not just be a case of saying, the funder is paying. That is something I have built into our systems, looking at past cases to understand where overspend occurs.
Most of it is not deliberate. It is overly optimistic forecasting, or trying to force a case into an unrealistic budget. The issue is that it only becomes clear later, when one part of the case absorbs the budget and nothing is left for the rest. As an industry, we need a more realistic starting point. If a case is likely to run 20–30% over budget, that should be addressed upfront.
Lawyers often keep budgets low because they think funders prefer that, but funders actually want accuracy to ensure the investment-to-quantum ratio works. It is also a due diligence issue. If under-budgeting is allowed, either the lawyers need challenging or the funder does not fully understand the case. Post-PACCAR, returns are often based on a multiple of drawn capital, so you do not want to give that away unnecessarily.
A particular bugbear of mine is consequentials. From an IP’s perspective, it sharpens the focus on our role as case manager. Too often, the emphasis is on budgets and funder parameters, and the client gets lost, particularly at consequential hearings.
If a case is lost, funding or CFA structures often allow others to step away, leaving the IP exposed. Even where there are grounds for appeal, there is no certainty of continued support, and ATE insurers may not cover those stages, creating a real gap. Some IPs understand this. Many do not. It is not just funders. Under a CFA, lawyers can also withdraw at the most vulnerable point.
A funder that stands behind the client when things go wrong would have a clear differentiator. Too much focus is placed on costs and returns, and not enough on the client’s residual risk. The market needs to consider the full lifecycle, from cradle to grave, especially the downside, because that risk is foreseeable from day one.
That is part of experience, understanding and dealing with funders. While cradle to grave is one thing, I had not factored in everything beyond that. The point is that when looking at a case, you are not just looking at the win, you are looking at enforcement, collection and how everyone is protected.
Or at least thought about. It all needs to be thought through. We talk about cradle to grave, but perhaps we should start earlier, at conception. Some already fund early-stage steps like counsel’s opinion, which helps price risk. Most clients do not care how it is done. They want a good outcome and to know their needs have been considered from start to finish.
Too much of the market leads with capital and returns, rather than solving the client’s problem. The opportunity is better engagement: understand the problem, structure the solution, and communicate it clearly.
If funders are selling a product, it is like a bank offering an overdraft or a loan without addressing the problem. Approaching someone like you without understanding the pressure points, and then using finance alongside more advanced insurance products to solve them, is what a complete service should look like. Most funders are not doing that.
I have taken plenty of blows from funders, but the worst was my own funder changing sides mid-litigation. There was a shortfall of a couple of million in insurance against costs. The defendant sought to claim against me and the funder for anything above that. Despite my objections, the insurer settled part of the costs to exit quickly and refused to fund the appeal, leaving me with the balance.
That effectively blocked the appeal. As I saw it, they protected themselves and left me exposed on what I believed was a winnable claim. Experiences like that suggest some funders are more focused on themselves than on helping. There is room for more balanced, thoughtful approaches, rather than simply pricing lower and moving into riskier cases.
I am not asking for anything unrealistic, but there are simple improvements, such as involving creditors to share risk and returns. At the moment, it still feels a bit stuck. It has been one of my biggest criticisms over the last twenty years that funders tend to replicate the same model with only slight variations, although that may be starting to change.
Has anything really changed since PACCAR Inc v Competition Appeal Tribunal and the Civil Justice Council review? When I started around 2010, most funders were lawyers. More recently, sophisticated finance professionals have entered the space, shifting it towards a more finance-driven model.
There was a ripple, and then it settled back to normal. The main issue now is the noise around funder performance. Share prices have fallen sharply for a number of funders. There have been some high-profile cases, and one or two have effectively gone bust.
That may be a sign of the market maturing. There has been a wave of new entrants, often with different names but very similar models, sometimes set up by people coming out of other funders. It can become quite confusing. The more serious concern is the risk of a funder failing halfway through a case. That is a much bigger issue.
We are seeing a natural phase of consolidation. Too many participants chasing too small a pool of opportunities. Rather than growing the overall market, they have been competing over the same work. You just do not want to be the IP in the middle of it when your funder goes bust on you.
That has been an underlying theme since the industry started. There have not been many examples, but when they occur, they are always a surprise. Ultimately, it comes down to the business model. The industry has matured, but some funders still fall away when their models do not evolve.
On funders chasing the same cases, it comes back to innovation. Rather than everyone pursuing CAT claims with large sums, despite the mechanism being untested, there is a need to think differently. For most funders, due diligence means avoiding unsettled law. The CAT was clearly such an area, so the losses are not surprising.
There is also an opportunity for funders to train lawyers better. Lawyers act as informal salespeople, referring clients, yet some promote captive funding models that are rarely used and feel like window dressing. Leading with taking a large share of proceeds through funding is the wrong approach. When I look at cases, I want lawyers open to multiple structures so all options remain available. The best lawyers can advocate for funders by explaining options in a balanced way, leading to higher-quality cases. Those focused only on funded models tend to prioritise origination and financing, which does not always produce the best outcomes.
Looking ten years ahead, what should the market look like? If you were designing it from scratch, what would the next decade look like?
One of my hobbies is collecting science fiction, particularly older works, because I am fascinated by the fallacy of prediction. Last and First Men by W. Olaf Stapledon from 1930 predicts a billion years of human evolution but completely misses the Second World War nine years later. You can sometimes predict what will happen, but not when.
A natural extrapolation, especially with AI, is that within the next ten years, any claim that could be brought will be brought, because AI will find it. Every known frontier, from competition claims to directors’ claims, will be fully explored, identified and pursued. What I cannot predict is how that market will be funded.
There will be far more claims, and litigation will become a more tangible asset, not just in insolvency estates but on corporate balance sheets. I am already looking at projects where latent claims are being identified and valued using AI. The flip side is that companies will need to account for claims against them. How that affects accounting and risk is unclear, but you could see a world where potential claims, for and against, are much more visible.
The real challenge will be funding and managing that market. It will be larger and more competitive, and the issue will not be finding claims, but handling them efficiently, through courts, mediation, or other systems. You could see a world where managing claims becomes a constant process, or even a separate industry supporting businesses.
That is starting in the US, with AI being used by the plaintiff bar to improve efficiency, share information and originate cases. Companies like Darrow AI identify and assess claims using open-source data. In Australia, securities class actions have been driven by technology spotting unusual stock movements. I have seen claims identified this way worth billions.
It is eye-watering amounts of money, many tens of billions coming out of it. That process will solidify. There will be wins and losses, but it is going to become wired into economies. People will get better at finding these claims, and there will be someone coming along saying, I have found this claim for you, can we agree a split? Away we go. That is going to become a much more American system.
It all goes back into the system. Whether it is right or wrong, it will be found out over time. At the moment, I have no real sense of how many viable claims are still out there, or even what that looks like in practice. But it is going to expand the market and bring more money into it. So in the end, the lawyers will be fine.
It is a horror story to end with.
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