Government set to push Litigation Funding Bill into summer 2025
The newly appointed government is set to push the Litigation Funding Bill until after a review is concluded, which could be at least summer 2025.
Lord Sandhurst Guy Rhys put a written question to the Ministry of Justice late last month, asking whether they plan to by reintroduce the Litigation Funding Agreements (Enforceability) Bill.
Last year, the Supreme Court ruled in the PACCAR case that the litigation funds backing the claims against the truck companies did not have the correct financial arrangements to support the court’s actions properly.
This decision threw the litigation funding industry into a state of uncertainty, and after much lobbying, the previous Justice Secretary Alex Chalk vowed to reverse with the bill.
However, the election was called and the Litigation Funding Bill did not make it into the wash-up.
Answering Lord Sandhurst question, Lord Frederick Ponsonby, who also serves as parliamentary under-secretary of state for Justice, did note that “the government recognises the critical role third-party litigation funding plays in ensuring access to justice.”
However, he added that “following the PACCAR judgement, concerns have been raised about the need for greater regulation of Litigation Funding Agreements, or greater safeguards for claimants.”
He stated that the “government is keen to ensure access to justice in large-scale and expensive cases, whilst also setting up adequate safeguards to protect claimants from unfair terms.”
He explained that the Civil Justice Council is considering these questions and others in its review of third-party litigation funding” adding “hopes to report in summer 2025”.
It is expected that the Civil Justice Council will provide an interim report by Summer 2024.
Lord Ponsonby said: “The government will take a more comprehensive view of any legislation to address issues in the round once that review is concluded.”
Commenting on this, Neil Purslow, chairman of the International Legal Finance Association, said “it’s deeply disappointing the government has taken the decision to seemingly deprioritise access to justice for people like the sub-postmasters by kicking the can down the road.”
“When people like Alan Bates, a former Lord Chief Justice, and politicians from across the political divide are all united in backing a fix it’s difficult to understand why the government won’t bring forward a simple and speedy solution for the benefit of claimants and the wider legal sector,” Purslow noted.
He said that “the issues are clear, the solutions are known, and the need is urgent.”
But Seema Kennedy, executive director of Fair Civil Justice (body of US Chamber of Commerce), welcomed the government’s decision to delay pending the outcome of the Civil Justice Council review.
She commented: “In the 12 months since the PACCAR ruling by the Supreme Court, and despite the claims from funders and law firms about the existential risk to the industry, there has been a surge of new group action claims, with funders able to find work-arounds to existing agreements and proceed much the same as before.”