The uncertainty that has dogged litigation funders since last summer looks set to continue after the new Labour government overlooked the sector in its initial legislative programme.
A bill to reverse the Supreme Court’s judgment in PACCAR was lost after former PM Rishi Sunak called a general election in May. The Litigation Funding Agreements (Enforceability) Bill reached committee stage but ran out of time before parliament shut down.
There was no specific mention of litigation funding in the King’s speech on Wednesday, although the Crime and Policing Bill, and Victims, Courts and Public Protection Bill – two of 40 bills announced – appear to be wide enough in scope to include it at some point.
Practitioners and funders craving assurances since the PACCAR ruling have been left disappointed.
Neil Purslow, chairman of the International Legal Finance Association, said: ‘Current claimants, from shopworkers to consumers, will continue to face uncertainty until this issue is resolved. As the justice secretary said this week, “justice delayed is all too often justice denied”.
‘We urge the government to find a way of fixing this issue quickly to ensure individuals and businesses like the subpostmasters can continue to secure justice.’
The abandoned legislation of the last government had sought to clarify the legal position concerning the enforceability of litigation funding agreements. The Supreme Court had ruled that a litigation funding agreement fell into the statutory definition of a damages-based agreement, calling into question whether it could be enforced.
Announcing the now-defunct bill in April, then justice secretary Alex Chalk said the government should intervene to ensure claimants facing defendants with deep pockets could pursue justice.
The measure was supported by Alan Bates, the subpostmaster who led a group action against the Post Office using third-party funding. He said the action would not have been possible in the post-PACCAR climate.
Supporters of reform remain hopeful that the issue will be revisited by ministers.
A review of third-party litigation funding by the Civil Justice Council is due to publish its interim report this summer.
