Government's inaction risks litigation funding integrity

One year after the Civil Justice Council (CJC) released its comprehensive report on litigation funding, concerns are mounting regarding the Government's failure to implement critical reforms. The CJC’s final report, born from a 14-month review, made a key recommendation for the urgent reversal of the Supreme Court's 2023 PACCAR judgment through retrospective legislation. Although the Government accepted this recommendation and pledged to legislate by December 2025, no bill has yet emerged. Furthermore, recent announcements, including the King's Speech, offered no provisions addressing the PACCAR issue.

Nicholas Bacon KC, a former member of the CJC Working Party on litigation funding, highlighted that without swift action, the UK "risks jeopardising" its position as a top global venue for dispute resolution. His sentiments were echoed by Dr John Sorabji, who noted that it is "deeply disappointing that despite the urgency" surrounding the need for reform, there appears to be no legislative movement following the King's Speech. He urged the Government to apply the changes to PACCAR "both retrospectively and prospectively."

Bacon further stated that reversing PACCAR was "one of key and most urgent recommendations made by the CJC Working Party." He expressed frustration that nearly three years since the Supreme Court's decision, there has been substantial inaction on these reforms. He warned that the longer the issues remain unresolved, "the greater the damage likely to follow," as clarification in the law is essential for a modern legal system.

In his remarks, Sorabji reiterated the necessity of reform, pointing out that the initial recommendations from the CJC were rooted in extensive consultation and highlighted the urgency for change. With ongoing uncertainty in the litigation funding market, he stressed the increasing injustice faced by those affected by outdated funding agreements and the need for the Government to act decisively.

Both Bacon and Sorabji have underscored that the UK’s reputation as a leading venue for dispute resolution is at risk. They argue that an arena lacking viable funding mechanisms and risk-sharing options is poised to lose its competitive edge to other jurisdictions. Their calls for action challenge the Government to focus on necessary reforms to support a fair and accessible legal environment, reinforcing the importance of upholding the UK’s standing in global dispute resolution markets.