New rules on litigation funding needed

The Law Society of England and Wales has called on the Solicitors Regulation Authority (SRA) to ensure that any upcoming regulations for third-party litigation funding effectively address real risks while maintaining consumers’ access to justice. The Society acknowledges that while litigation funding can empower individuals to pursue claims against businesses, it cautions the SRA against assuming that all consumer claims necessitate increased regulatory involvement.

In a recent statement, Law Society president Mark Evans highlighted the need for the SRA to utilise existing regulatory powers and guidance more efficiently before considering imposing any new obligations on solicitors. He stated that “We support the SRA’s efforts to improve transparency and consumer protection, but any new requirements must target genuine risks rather than create unnecessary burden.”

Evans also pointed out that litigation funding serves as a crucial pathway to justice for consumers who might otherwise be unable to afford to initiate a claim, stressing that “additional regulation must be in-line with the risks identified.” He acknowledged the problems exposed by the collapse of firms like SSB Group, which underscored the necessity for effective safeguards. However, he cautioned that a one-size-fits-all approach could inadvertently complicate the process for individuals seeking to resolve their claims. In conclusion, as the SRA navigates this regulatory landscape, it is essential to balance consumer protection with the fundamental right to access justice without excessive hindrances.