The EU is planning no new regulation of third-party litigation funding, the bloc’s justice commissioner said this week in an announcement that will be closely scrutinised in Westminster.
Michael McGrath said the commission will prioritise monitoring the implementation of the Representative Actions Directive, which came into force in 2020 and requires member states to create pathways for collective redress, over any new legislation.
The announcement comes as the UK government mulls its response to the Civil Justice Council’s proposal in June for ‘light touch’ regulation of litigation funding through regulations issued by the lord chancellor. Justice minister Sarah Sackman told MPs last month: ‘We are aware that many are eagerly awaiting the government’s response, and I look forward to announcing our way forward in due course. We have to get this right.’
Funders welcomed the EU’s stance. Paul Kong, executive director of the International Legal Finance Association, said he was ‘delighted’ by McGrath’s statement. ‘This appears to close any talk of the need for new regulation, which was completely without evidence and created considerable uncertainty for the sector.’
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