Camrose: This bill is not the vehicle for non-CAT cases
The government has acknowledged concerns that its legislative proposal to address the Supreme Court’s PACCAR ruling does not go far enough – but further change is not imminent.
A solution that covers all litigation funding agreements – and not just those in cases before the Competition Appeals Tribunal (CAT) – will need to wait for another legislative vehicle.
In PACCAR, the Supreme Court decided that third-party litigation funding agreements taking a percentage of the damages were caught by the Damages-Based Agreement Regulations 2013 – most do not comply with them.
An amendment to the Digital Markets, Competition and Consumer Bill tabled last month looks to tackle the impact of the ruling on litigation funding agreements for opt-out collective proceedings in the CAT only.
During a debate on the bill in Parliament last week, Lord Sandhurst, also known as Guy Mansfield KC, said the clause needed to be “redrafted and expanded” to cover non-CAT cases, and that he had provided the government with a draft.
“This is critical to provide certainty and effective access to justice, and to protect and expand consumer rights: the bill’s stated aim,” he said.
Viscount Camrose – a minister in the Department for Science, Innovation and Technology who responded to the debate for the government – said the amendment “urgently addressed the potential implications of the judgment on claims under competition law, and we feel this has provided some much-needed certainty to funders and claimants”.
While acknowledging interest from peers in extending this to all parts of the civil legal system, he said he had been advised that the bill was “not the appropriate vehicle to deliver this aim”.
But he added: “I can assure noble Lords that the Ministry of Justice is actively considering options for a wider response.”
That was backed up this week by justice minister Lord Bellamy in response to a written question from solicitor peer Lord Gold, who chairs the investment committee of litigation funder Balance Legal Capital.
“The government is assessing the impact of the judgment and considering options for non-CAT proceedings,” the peer said.
In his speech, Lord Sandhurst complained that, by failing address opt-in group actions not brought in the CAT, the amendment “does not go anything like far enough”.
He said: “In fact, such funded cases throughout the court system, particularly in the High Court, make up the majority of cases that litigation funding supports. I am told that CAT cases are just the tip of the iceberg.
“While the current clause 126 goes a little way, it will put matters right for so-called opt-out cases, but will not help in opt-in cases, nor in conventional bi-party litigation – one large against one small. The small company fighting Apple will, effectively, not be able to go to a funder.”
Last month, the CAT approved a litigation funding agreement that was amended to take account of PACCAR.
