In supporting an office holder, a litigation funder fulfils a key role of enabling litigation to be commenced in circumstances where that litigation may not otherwise have been pursued. However, seeking an injunction as part of an intended claim is not without risk. The Court of Appeal has confirmed that a cross undertaking in damages is required – and the default position is that it should be unlimited in scope.

This case concerns the liquidation of Edengate Homes, and the liquidator’s assignment of a cause of action to a litigation funder. A former director of Edengate, who was going to be the defendant to the claim, sought to set aside the liquidator’s assignment of the claim. At first instance, it was held that the director did not have the necessary locus to bring the claim, and the decision to assign the claim was not perverse.