Increased access to justice for claimants

Ordinary people are set to gain greater access to justice as the Government announces new legislative measures designed to aid claimants in securing necessary funding to confront powerful organisations in court. This is particularly significant following the 2023 Supreme Court ruling in PACCAR, which led to uncertainty surrounding the access to third-party funding for civil cases against well-resourced opponents.

Third-party litigation funding allows individuals to pursue legal action without the crippling burden of upfront costs. In these arrangements, a litigation funder covers the legal expenses in exchange for a portion of any compensation awarded. The PACCAR judgment, categorising these funding arrangements as “Damages Based Agreements”, severely hindered the ability of claimants to access third-party funding, resulting in a notable decline in collective action lawsuits.

In response, the Government is now taking affirmative steps to eliminate barriers that impede access to justice. It has clarified that Litigation Funding Agreements do not fall under the category of Damages Based Agreements, thereby restoring protections for victims and claimants alike. Minister for Courts and Legal Services, Sarah Sackman KC MP, remarked, "The Supreme Court ruling has left claimants in unacceptable limbo, denying them of a clear route to justice." She highlighted the importance of litigation funding by stating, “Without litigation funding, the Sub-postmasters affected by the Horizon IT scandal would never have had their day in court."

These legislative measures serve not only to empower ordinary individuals in their legal battles but also to secure the UK's reputation as a global leader in dispute resolution. The UK’s legal services industry plays a crucial role in the economy, boasting a value of £42.6 billion and employing a highly skilled workforce of 384,000 professionals.

The new framework proposed by the Government aims to ensure that litigation funding agreements are fair and transparent, ultimately making the process more equitable for all parties involved. This initiative follows a thorough review conducted by the Civil Justice Council (CJC) earlier this year, the findings of which the Government will continue to evaluate as it implements these vital changes. The commitment to support "David vs Goliath" cases signifies a significant shift towards greater equality in access to justice for all individuals, reinforcing the principle that justice should not be the privilege of the affluent alone.