Unlock the Editor’s Digest for free: UK government to protect litigation funding sector
The UK government is set to change the law to protect the litigation funding sector following a Supreme Court ruling that has put the industry at risk. The ruling has raised concerns about the future of litigation funding agreements, which are crucial in supporting legal battles against corporate giants.
The Supreme Court judgment last summer has complicated the rules around litigation funding agreements, leading to fears that deals struck before the ruling may become unenforceable. This has put the business model of litigation funders in jeopardy, sparking calls for urgent legislative action to address the issue.
Litigation funders provide financial backing to parties in legal disputes in exchange for a share of the proceeds. This funding model has been instrumental in supporting cases like the one brought by sub-postmasters against the Post Office in the Horizon IT scandal. The High Court action in 2019 exposed flaws in the Horizon IT system, leading to the wrongful convictions of over 900 sub-postmasters.
The government’s plan to reverse the effects of the Supreme Court ruling has been welcomed by advocates for litigation funding. Alan Bates, who led the campaign against the Post Office, emphasized the importance of third-party funding in enabling ordinary individuals to take on powerful organizations.
While concerns have been raised about potential conflicts of interest and excessive fees associated with litigation funding, supporters argue that it is essential in ensuring access to justice for those who cannot afford legal representation. The government’s commitment to protecting the litigation funding sector is seen as a positive step towards maintaining the UK’s reputation as a hub for legal services.
As the government works to address the implications of the Supreme Court ruling, stakeholders in the legal industry are calling for swift action to safeguard the future of litigation funding. With the support of litigation funders, individuals like the sub-postmasters have been able to pursue justice against powerful entities, highlighting the crucial role that third-party funding plays in leveling the playing field in legal disputes.