Two former members of a group which advocated for litigation funding reform have spoken of their frustration at the continued lack of government response.
Nicholas Bacon KC and Dr John Sorabji were both on the Civil Justice Council’s working party on litigation funding, whose final report was published last year. Both criticised the virtual silence that has followed - and questioned why ministers are not responding more quickly.
The report’s key recommendation was for the government to immediately reverse the Supreme Court’s PACCAR ruling from 2023, which altered the classification of litigation funding agreements, bringing many within the scope of damages-based agreements potentially leaving them unenforceable.
Despite widespread support across the sector for the pre-PACCAR position to be restored, the Ministry of Justice has shown few signs of action, and the situation was not addressed in the King’s speech last month.
Bacon said a huge amount of work had gone into producing the report and that the lack of progress was ‘very disappointing to say the least’ as well as ‘terribly frustrating’ from a personal point of view.
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‘There are sound policy reasons why urgent steps should be taken to take the CJC recommendations forward,’ he said. ‘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.’
Sorabi, co-director of the UCL centre for dispute resolution, stressed that the report had called for urgent action, making the stasis of the past 14 months even more difficult to understand.
He 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, to implement effective, proportionate regulation.’
The government is understood to still be considering law reform, although there are few concrete indications about when this is going to happen.
Addressing the House of Commons last month, employment rights and consumer protection minister Kate Dearden said: ‘The PACCAR review involves complex issues, and it is important that we take the time needed to get it right.’
In December, courts minister Sarah Sackman KC issued a written statement announcing its intention to introduce legislation to mitigate the effects of the PACCAR judgment by clarifying that litigation funding agreements are not damages-based agreements.
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