Litigation funders have expressed disappointment at the UK government’s failure to include reform of the funding regime in its legislative programme, despite a pledge to correct the impact of the 2023 Supreme Court PACCAR decision.
Hopes that the government would deliver on its pledge to reverse PACCAR were dashed when its legislative programme for the 2026/2027 parliamentary session, as announced by His Majesty King Charles III today, did not include a draft bill.
PACCAR rendered most litigation funding agreements (LFAs) unenforceable by ruling that they were in fact damages-based agreements (DBAs) and should comply with the statutory DBA regime.
Legislation introduced by the last government to reverse PACCAR, which received cross-party support, fell before it was enacted due to the 2024 general election and has remained on the shelf since then.
In June last year, the Civil Justice Council report into funding recommended PACCAR be reversed “as soon as possible” as part of a package of proposed reforms designed to improve the regulation of LFAs.
Since then, the government has made several pledges to act, including last December when the Minister of State for Justice, Sarah Sackman KC MP, said the Supreme Court ruling had “left claimants in unacceptable limbo” and that the government would ensure ordinary people could “hold powerful organisations to account”.
Neil Purslow, chairman of the executive committee of the International Legal Finance Association, said: “We are deeply disappointed that the government has not included a bill to address the effects of PACCAR in the King’s Speech, despite ministers, the Civil Justice Council and the wider legal community acknowledging the urgent need to fix PACCAR.”
He added: “Every day that passes without a fix, consumers and small businesses continue to lose out on access to justice and their ability to hold corporate wrongdoers to account. Without urgent action, meritorious cases will remain out of reach and the integrity of the justice system will be further undermined.
“The government must honour its commitment and act at pace to implement a fix,” thereby restoring “confidence in the UK’s standing as a global centre for legal services”.
Legal measures contained in the speech include a Courts Modernisation Bill proposing “significant reforms” to the criminal justice system, which include controversial plans to further limit the right of defendants to jury trials, which are strongly opposed by the Bar Council, the Law Society and the Criminal Bar Association.
Among the proposals affecting corporate crime lawyers is a plan to create a Crown Court Bench Division to hear “suitably complex and lengthy fraud and other financial cases” that will sit without a jury.
Bar Council chair, Kirsty Brimelow KC, called for investment in the criminal justice system and underlined her “steadfast opposition to reducing jury trials”.
“If the government doesn’t invest in the lawyers who defend and prosecute cases, we will see them leaving the criminal Bar, which will lead to more delays in the system,” she said.
There are also plans to introduce a European Partnership Bill designed to introduce secondary legislation to deliver sectoral trade agreements planned with the EU, which Brimelow welcomed, saying “many of our expert practitioners have been engaged on EU-related matters over many years, amassing insights into Brexit and its aftermath, on the EU side as well as the UK”.
The government also plans to introduce a Competition Reform Bill designed to speed up market enforcement actions and merger approvals by the Competition and Markets Authority.
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