In R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28, the Supreme Court held litigation funding agreements are damages-based agreements and therefore unenforceable.
The Financial Times reported this week Alex Chalk, the Lord Chancellor, told it in a statement: ‘The government will be reversing the damaging effects of PACCAR at the first legislative opportunity.’
Litigation funding enabled the group action of 555 subpostmasters caught up in the Horizon IT scandal against the Post Office, led by Freeths partner James Hartley, which was dramatised by ITV in Mr Bates vs The Post Office.
Martyn Day, co-president of the Collective Redress Lawyers Association (CORLA), said: ‘It has been alarming to see those opposed to litigation funding—unscrupulous big businesses and their cheerleaders—attempting to argue for legislation to restrict funders and law firms from obtaining justice.
‘Group or collective actions are now an intrinsic part of our legal system. If the government were to cave in and impose ill-thought-out restrictions on the ways in which funders and law firms operate, they would be denying access to justice to millions of citizens while giving businesses and corporations, set on using restrictive or unethical practices, a free hand.’
The government has already set out its plans for certain categories of cases—clause 126 of the Digital Markets, Competition and Consumers Bill reverses the effect of the case, but only for opt-out clauses in the Competition Appeal Tribunal (CAT).
During a Lords debate in December on the Bill, Lord Sandhurst proposed a draft amendment to widen cl 126 beyond CAT. Viscount Camrose, for the government, stated the Bill was not the appropriate vehicle but the government was ‘actively considering options for a wider response’.
