The Litigation Funding Agreements (Enforceability) Bill continued its journey through the Lords on Tuesday with its Second Reading. The Bill aims to address the impact of the Supreme Court judgment in R (
Tuesday's debate focused upon all aspects of the Bill, as well as on the wider review of the litigation funding sector to be undertaken by the
- Access to justice: in the absence of legal aid, third-party funding is currently the only way in which some individual Claimants can have the means to litigate against larger and more well- resourced corporations. However, recent high-profile cases have highlighted the imbalance between the sums ultimately received by litigants and those realised by the entities that fund them. The Government noted that it was acutely aware of this issue and that more needs to be done in this regard.
- Retrospective effect: concerns were also raised about the consequences of the proposed amendment to s.58AA CLSA having retrospective effect. The example was given of Claimants who had replaced unenforceable funding agreements with enforceable funding agreements following
PACCAR and who may soon find themselves faced with two funding agreements on different terms. Whilst it remains to be seen whether this is a significant concern (particularly where funding agreements have been amended and restated rather than replaced) it was agreed that this point would need to be considered further to ensure that it works properly and fairly in practice. - Regulation of litigation funders: there was much support in favour of regulating litigation funders. This is likely to involve re-visiting the draft DBA Regulations produced in 2019, which were never introduced. It is not clear how quickly the Government will move to progress this.
The Bill will now advance to the Committee Stage for further debate.
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