Class action lawyers clashed over whether litigation funding is a blessing or a curse at a debate held as part of London International Disputes Week staged in response to Monday’s publication of the Civil Justice Council’s (CJC’s) eagerly awaited report on funding.

The differences in views between lawyers representing claimants and defendants have never been starker, following a week that saw the CJC publish its final report on litigation funding, and with the fallout from the Mastercard settlement ruling still reverberating.

The event on 4 June was chaired by Nick Bacon KC, of 4 New Square, and featured contributions from Patrick Green KC of Henderson Chambers; Ronit Kreisberger KC of Monckton Chambers; CORLA co-chair David Greene; and Kenny Henderson of CMS, who each offered a sharply defined perspective on the evolving role of third-party funding in the justice system.

Patrick Green KC opened the debate with a powerful defence of litigation funding as a tool for restoring balance in an unequal legal landscape. “Without litigation funding, you simply cannot get access to justice,” he declared.

Drawing on his experience in the Post Office scandal, Green described how funding enabled victims to challenge a “wall of lies” and secure redress. “People’s lives had been completely ruined… they were totally unable to get any proper recourse,” he said.

He acknowledged the loss of civil legal aid as a societal failure but insisted that litigation funding “allows claimants to be on a more equal footing with well-funded defendants”.

Referencing the CJC report – in which the Post Office scandal was mentioned – he approved the proposal that funding costs should become recoverable in exceptional circumstances, which he said many lawyers had argued “for a very long time”.

He added it would address “some of the worst behaviour on the defendant side, by imposing some potential discipline”, but needed to be done “in a fair and balanced way so that defendants are not put at an unfair disadvantage”.

Ronit Kreisberger KC offered a sobering counterpoint, questioning whether group litigation delivers justice. “It’s delivered headlines and hearings, but very little hard cash,” she said, referencing the Merricks v Mastercard case, where the average payout is estimated at just £45.

She argued that effective regulation and public enforcement are better solutions than unconstrained class actions.

Kreisberger warned that the current regime risks becoming a system “bearing limited fruit for the consumer”, and expressed concern that the legal process may serve lawyers more than litigants.

“We’ve seen cases running for many years at great expense… with limited processes like third-party disclosure and little practical benefit,” she noted.

David Greene, former president of the Law Society, framed litigation funding as a necessary evolution in the face of diminishing public enforcement. “Successive governments have sought to privatise the legal process,” he said, arguing that funding enables collective redress where regulators fall short.

He cited the Volkswagen Dieselgate scandal as a case where “a crime orchestrated from the very top” was uncovered not by regulators, but by private actors.

“There has to be some balance, some ability to shine a light on wrongdoing,” Greene insisted. “The growth of group litigation and funding in the British courts is an essential way of doing that.”

Kenny Henderson delivered a forceful critique of opt-out class actions, warning that they risk becoming a “curse” rather than a cure. “We can expect to see distribution rates of 5% or less,” he said, referencing expert evidence in the Merricks case. “That is not access to justice.”

Henderson argued that litigation is a poor substitute for effective regulation: “We’ve completely changed the role of the courts… from deciders of fact and law to outsourcing regulatory enforcement.”

Group proceedings and litigation, he argued, “are not a sensible avenue to disincentivise corporate misconduct”.

He also warned of a looming second wave of class actions driven by funders: “If significant settlements occur, we’ll see a surge – and with it, more cost, more complexity and minimal benefit to the public.”

Be it blessing or curse, both sides acknowledged the need for reform, particularly around distribution mechanisms. “We haven’t quite worked it out,” Greene admitted, referring to US experiences.

Kreisberger urged a nuanced approach: “Attacking these problems at such a high level obscures the differences between cases,” such as the Post Office on the one hand, and Merricks on the other.

She asked if stand-alone collective claims were an appropriate mechanism to ensure a transfer of value back to those affected.

However, Patrick Green concluded that there were two facets to justice – compensation and the declaratory aspect of a judgment.

Both mattered, he said, adding: “It is wrong to confine justice and one’s analysis of it, as to whether you’re getting full compensation or not.”

The event, held at the International Dispute Resolution Centre, was co-hosted by CORLA, CMS, 3VB and Henderson Chambers.

The Global Legal Post is a media partner of London International Disputes Week. For more coverage, click here.