Recent court decisions are making it harder for funders to support legitimate claims. The sector is also currently under review by the Civil Justice Council, an independent advisory body to the Ministry of Justice. And funders, as they are in every jurisdiction including here in Australia, face a constant barrage of baseless criticism from the US Chamber of Commerce and its front organisations, seeking to shield its members - accused of corporate wrongdoing - from scrutiny.

In Australia, we've seen this pattern before. Despite an independent commission finding concerns about funding came 'from corporate defendants who were facing litigation', politicians aligned with the US Chamber brought forward disproportionate regulations designed to impede the ability to finance group litigation.

Unfortunately, the US Chamber achieved its desired impact. Access to justice for claimants was denied, corporate wrongdoers were protected, and claims started to dry up.

But within two years, regulation of class actions came full circle. The new government in 2022 recognised the new laws were 'red tape' for the sake of it, and Australia's flirtation with overbearing regulation came to an end. Since then, we’ve seen cases rebound and justice start to be secured once again.

This revitalised landscape has delivered real results. Last year, more than 8,000 taxi drivers secured a landmark settlement against Uber, with litigation funding making it possible for these drivers - whose livelihoods had been threatened - to take on a global giant. Across Australia, from bushfire victims to communities affected by environmental contamination, litigation funding has proven essential in delivering justice to ordinary people.

The UK now stands where Australia once did before. The Supreme Court's 2023 PACCAR ruling has created unbound uncertainty for the sector, with funders having to rethink how they structure their agreements while defendants seek to exploit this ambiguity to their advantage. 

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The myths pedalled by the US Chamber’s campaign group in the UK, the ironically named Fair Civil Justice, are built on falsehoods that risk clouding reality and choking off access to justice. Their calls for caps on fees are built on nonsense claims that funders back 'frivolous cases'. But nothing could be further from the truth. In reality, funders in the UK fund as few as 3% of the cases they're approached about.

Their calls for transparency around funding arrangements are equally misleading. Far from promoting fairness, such disclosure would simply arm defendants with knowledge of claimants' resources and resolve, feeding into cynical litigation tactics designed to price and time out legitimate claims. We've seen this playbook before - large corporations, like the Post Office, deploying strategies to exhaust claimants' resources through prolonged litigation, making justice unattainable for all but the wealthiest.

Beyond its role in promoting justice, litigation funding represents an important part of the UK's world-leading legal system and a significant contributor to UK plc. It keeps our corporate sector accountable and our markets transparent, fostering an environment where businesses operate with integrity.

The Civil Justice Council and government should be mindful of mistakes made in Australia and resist the temptation to placate the powerful, well-resourced and disingenuous minority perspective of the US Chamber of Commerce. The priority must be addressing the uncertainty created by the PACCAR decision, which has cast doubt on the enforceability of litigation funding agreements. Without this clarity, funders will inevitably become more selective, potentially declining to back even the strongest of claims.

In Australia, legislators learned the hard way that excessive regulation stifles legitimate claims and protects corporate wrongdoers. The UK now faces a choice: follow Australia's initial misstep, or learn from that experience and ensure civil justice develops in a way that remains accessible and fair for all.

 

John Walker is the chairman of the Association of Litigation Funders of Australia. He has participated in over 500 funded claims over the past 25 years

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