Litigation funding is far from widespread in Nigeria. Litigants, however, especially private individuals and small and medium sized enterprises without a dedicated or readily accessible budget for litigation will often have to seek funding for their objectives of realizing returns from litigation budgets and costs applied by them in aid of their real or imagined legal entitlements.
Relevant statistics are extremely limited. It is sufficient to say that access to justice is safeguarded by relatively high court fees and costs. There are issues of general conditions of administration of justice, including the length of time it takes to settle disputes as well as the quality of justice dispensed. The typical award of costs a successful plaintiff receives is lamentable and retrogressive in terms that defy reasonable explanation. The only possible justification is “that is what Nigerian courts now award.” What follows is based on responsible monitoring of Nigerian courts.
Institutional litigation, involving companies and other qualified legal persons, likely does not routinely require substantive funding arrangements involving specialized third party funders, in Nigeria or elsewhere. In Nigeria, if someone deploys third party funding arrangements, the deployment will typically be as resourceful redoubt, rather than as normal recourse. Institutional legal funding is not a feature of the Nigerian legal landscape at this time. At best, it is undifferentiated activity that is likely not commercialized in any recognizable way. I am unaware of any other legal funding firm in Nigeria except for aetasLF. This signifies at least two things, each of which underscores the materiality of private sector involvement and resourcefulness:
- Sustained dissemination of material Information to the potential market for it is absolute key.
- Regulation of formal legal funding initiatives is nonexistent (as is the case in developed systems where litigation funding is fairly rooted), and depends on ethical self-regulatory standards of an offer of funding, as is topical in developed jurisdictions.
Although there is ample normal resort to the courts and to legal options in Nigeria, enough to carry an engaging amount of legal history and to signpost areas requiring attention or reform, it would probably not be worthwhile to seek to compare the local environment with what obtains and perhaps justifies litigation funding. For one thing, the financial system is only gradually consolidating itself, as illustrated by recent and current post-nominal alignment processes in the banking, pensions, and insurance sub-sectors.
General credit facilitation via the usual sources (banks and financial institutions) is on a distinct upward drive as of this present year. Dedicated facilitation, such as for legal fees, may seriously not be so far away. Much depends on the prioritization of law in action by potential funders.
Thus there are substantial, developing country attributes which define, differentiate, and explain the local environment in Nigeria. The upside is that development (as process, and as an over-arching sine qua non) implies and necessitates an essential deepening, evolution, and maturation of legal and regulatory infrastructures, in terms not too far different from the necessity to upgrade physical infrastructures.
And there are very real incidents and marks of economies of scale, especially in a pluralistic legal system where a significant proportion of disputation (and other legal expense activity) is still to be accommodated and resolved by reference to localized custom and customary law and process, especially where there is a pronounced need for sustainability through law. Indeed, customary norms and values may explain the availability of non-institutional legal finance options, such as where a grandee would habitually (but not institutionally) financially support party/parties to (a) legal situation(s).
Yet all forms of legal expense activity deserve to be taken seriously enough to merit legal or litigation funding, more so where there is a characteristic market predilection for entrepreneurism and transaction, which trumps a litigation only perspective.
All these factors add up to the significance of an enhanced law-based culture for a developing socio-political economy, in the best interests of entrenching and sustaining valuable norms and rights. This is more so in light of a turbulent recent past (the 1980s and 1990s) wherein dictatorship had taken root, often at the expense of the rule of law and the quality of norms. The importance of judicial pronouncements in response to exercises of executive or administrative power is self-evident.
Today, at least where the subject matter is not subject to customary law, there is not necessarily always much by which to differentiate legal culture in Nigeria from what is observable in developed systems. There is however a real difference in law-in-action, so to speak; the ways and means available to address and to accommodate means of access to tangible legal status and, consequently in case of disputation, to law where there is no institutional litigation (or other legal) financing option.
There is much for the law (including the rule of law) to catch up to, in terms of the rapid pace at which the Nigerian political economy is gaining ground in a global context. It helps that, for the most part, there have always been workable laws and frameworks for most activity. The marked differentiation of prospects for litigation and other legal funding in Nigeria is to be found in pressing requirements of practical entrenchment of law as a catalyst. The better part of these requirements is to be found at the confluence of public laws and regulations on the one part, and commercial laws on the other.
aetasLF is still fledgling. It depends on privately held resources which do not include loans. It draws its third party functionality from certain minima, via:
- Manifest merit in a request received for funding, close enough to assured success or completion of the underlying cause.
- Manageability of the size of funding requirement (if the request is large, aetasLF brokers require funding).
Its activities are typically in aid of illiquid but legally well positioned individuals and SMEs with strong clear prospects in point. aetasLF does not itself take up the legal cause in any circumstances but will seek to influence the course of such causes as it agrees to provision. It provisions litigation, as well as transaction costs, plus a premium.
Photo Credit: Michael Coghlan
This guest blog post was written by Olusoji O. Elias, Counsel/CEO of aetasLF, a private legal funding initiative primarily focused on Nigeria. You can connect with him on Twitter at @aetasLF or on Facebook at https://www.facebook.com/pages/aetasLFcom/237001783056988.