Minister says government still plans legislation despite absence from King’s Speech
The government yesterday said it was still committed to litigation funding reform, as two members of the Civil Justice Council’s working party criticised the failure to take action, a year on from its report.
In comments to mark the anniversary, Nicholas Bacon KC warned that without urgent action the UK “risks jeopardising” its dominance as a global venue for dispute resolution.
Working party co-chair Dr John Sorabji, meanwhile, said it was “deeply disappointing” that the King’s Speech did not contain a bill.
The report recommended the introduction of “light-touch regulation” of litigation funding through legislation, as well as greater use of costs management in funded cases.
It said the first step should be to reverse the Supreme Court’s 2023 PACCAR decision by legislation, which should be “both retrospective and prospective in effect”, as soon as possible.
Last December, the government announced it would legislate to reverse PACCAR, which has brought significant uncertainty to the litigation funding market, but then it did not appear in last month’s King’s Speech.
Giving evidence yesterday to the justice select committee as part of its inquiry into access to justice, courts minister Sarah Sackman said this was because of “the many competing priorities the government has”.
But she stressed that the Ministry of Justice (MoJ) remained committed to introducing the legislation.
The fact that a measure is not in the King’s Speech does not mean that it cannot be brought forward.
Ms Sackman added that “perhaps one silver lining of the delay” was that it gave the MoJ “further time to consider more holistic or wholesale changes that might be desirable” following the CJC review. But she gave no timescale as to when there might be an announcement.
Speaking before Ms Sackman’s comments, Mr Bacon said it was “very disappointing to say the least” that no progress had been made on reversing PACCAR a year on from the report and nearly three years since the Supreme Court decision.
“A huge amount of work goes into producing reports of this kind and the lack of any progress on the recommendations, which were welcomed by the government at the time, is terribly frustrating from a personal point of view.
“Personal views aside, there are sound policy reasons why urgent steps should be taken to take the CJC recommendations forward. The longer they are left unresolved, the greater the damage likely to follow.
“There are doubtless cases which remain bogged down in satellite litigation that would simply disappear with the implementation of the PACCAR recommendations. Clarity in the law and consistency in its application is key to any modern functioning legal system. Uncertainty is undesirable.”
Mr Bacon said there was also “an urgent need” to resolve the effect of PACCAR “and begin earnest work in creating an improved platform for contingency style fee agreements to replace the existing DBA [damages-based agreement] regime which are not fit for purpose in a modern accessible legal system.
“The UK prides itself in being the leading venue for dispute resolution; but an arena which does not provide appropriate mechanisms for funding and the sharing of risk to pursue claims risks jeopardising a dominance it might otherwise have over alternative venues for resolving disputes.”
Dr John Sorabji, a barrister and co-director of the UCL Centre for Dispute Resolution, added: “Having accepted the need to act, with continuing uncertainty in the litigation funding market and injustice continuing to arise where historic funding agreements are concerned as well as where present and future funding is concerned, there is an ever-more urgent need for the government to act, to implement the reversal of PACCAR both retrospectively and prospectively, and to implement effective, proportionate regulation.”
In January, justice minister Baroness Levitt told Parliament that, as recommended by the CJC, “we will introduce a new regulatory framework aimed at enhancing claimant protection, transparency, and the effectiveness of the litigation funding market.
“We recognise the critical role third-party litigation funding plays in access to justice. That is why we are committed to ensuring it works fairly for all. We will outline next steps in due course.”