Arbitration and litigation funding legislation falls as UK heads to the polls

Laws clamping down on power of Big Tech and exonerating victims of Post Office Horizon scandal rushed through
London, UK - August 1, 2022: Closeup shot of the Houses of Parliament building in Westminster, London, UK.

Nigel J. Harris; Shutterstock

The announcement by UK Prime Minister Rishi Sunak of a surprise general election on 4 July has caused two key disputes-related pieces of legislation to be lost.

Bills to modernise the UK’s arbitration regime and resolve uncertainty around the rules governing litigation funding agreements have both fallen victim to Sunak’s decision to trigger the dissolution of parliament. 

The much-anticipated Digital Markets, Competition and Consumers Bill, however, has been enacted, as has the bill to quash the convictions of hundreds of postmasters and mistresses (SPMs) who were prosecuted by the Post Office on the basis of faulty data provided by its Horizon IT system.

Following Wednesday’s announcement by Sunak, a ‘wash-up’ period was triggered when any final bills that could become law were considered. Government and opposition business managers were still discussing the passage of legislation today (24 May). 

However, when the remaining business was set out on Thursday, neither the Arbitration Bill nor the Litigation Funding Agreements (Enforceability) Bill 2024 were listed. As a result, the bills will fall until a new government picks them up.

The Arbitration Bill was at the report stage in the House of Lords. Its measures were designed to maintain the UK’s competitiveness as an arbitration seat. They included a simplification of the procedure and narrowing of the grounds for challenging arbitral awards as well as provisions allowing court orders to enforce emergency arbitrators’ decisions and emergency relief in support of arbitral proceedings against third parties.

Sources familiar with the matter said provisions in the Bill addressing the governing law of arbitration agreements needed further clarification, meaning the bill was not in a position to be enacted. 

Meanwhile, the Litigation Funding Agreements (Enforceability) Bill 2024 aimed to reverse the impact of last July’s controversial UK Supreme Court PACCAR decision, which rendered most litigation funding agreements unenforceable. 

With the general election looming, the fate of this crucial legislation was sealed; it, too, was at report stage but was not tabled.

The Digital Markets, Competition and Consumers Bill, however, has been passed into law. The act introduces a new competition law regime for digital markets and enhances the Competition and Markets Authority’s enforcement powers in competition and consumer law.

A briefing by Linklaters described the law, which is expected to come into force in the autumn and targets the world’s largest technology companies, as the most significant reforms to competition and consumer protection laws since the introduction of merger control over 20 years ago.

Despite misgivings from judicial peers, the House of Lords approved the final stages of the Post Office (Horizon System) Offences Bill, which will now become law. The act, which had cross-party support, exonerates convicted SPMs, bypassing the appeals process, and allows them access to compensation schemes.

Law Society of England and Wales president Nick Emmerson reiterated concerns about the measure, which he said required adequate parliamentary scrutiny. 

“This bill has now been pushed through both Houses at pace, and [we] remain concerned that it could set a precedent for parliamentary intervention in the justice system,” he said.

Commenting on the wider impact on the justice system of the general election he said: “The upcoming general election is pivotal for our justice system. The legal sector contributes £60bn to the economy and is important in securing economic growth. 

“Delivering access to justice is vital for our justice system, and all political parties must commit to upholding the rule of law and narrowing the justice gap to create a fairer, more accessible system for all.”

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