The government remains committed to overturning the PACCAR ruling but the delay in doing so may allow it to bring forward broader litigation funding reform, justice minister Sarah Sackman said yesterday.
She also refused to be drawn over criticism of the Ministry of Justice’s proposed interest on lawyers’ client accounts (ILCA) scheme, and indicated that a review of legal regulation is not on the agenda at the moment.
Ms Sackman, the minister for courts and legal services, answered questions from the justice select committee in the final evidence session for its inquiry into access to justice.
Last December, the government announced it would legislate [1] to reverse the Supreme Court’s 2023 PACCAR ruling, which has brought significant uncertainty to the litigation funding market.
But there was then huge disappointment when the bill did not appear in the King’s Speech [2] last month.
Asked about this by committee chair Andy Slaughter, Ms Sackman said it was because of “the many competing priorities the government has”. But she stressed that the MoJ remained committed to it.
“Perhaps one silver lining of the delay”, she went on, was that it gave the MoJ “further time to consider more holistic or wholesale changes that might be desirable” following the Civil Justice Council’s review of litigation funding, which was published a year ago yesterday [3].
The MoJ confirmed in January that it would introduce a new regulatory framework [4] for funders but no detail has been given on this.
The ILCA consultation [5] closed on 9 March and Ms Sackman said she did not want to pre-empt the MoJ’s official response to it.
But she said the government was entertaining the idea because of “the need for access to justice and secondly, the recognition that those firms in this country that deliver brilliant services to their clients and support lots of employment and businesses, do so in no small part on the foundations of the British justice system.
“That depends on the integrity and the viability of that system. They can’t go about their work without a rule of law which vindicates the promise of access to justice.”
A central criticism of the proposed scheme is that it would be managed by the MoJ and the money raised just added to its general budget. In other countries where ILCA schemes exist, generally an independent foundation operates the scheme and puts the money to specific access to justice-type purposes.
Ms Sackman declined to get into this argument either. “We’ve got to decide, first of all, whether the principle of it is right. We’ve got to get the design right.
“There may be advantages to having an independent operator. There may be advantages, whether to do with administrative burden and cost and then where money is redirected to access to justice purposes, of keeping it within the Ministry of Justice.
“I can see pros and cons, but I’m not going to speculate on what would be a preferable model.”
Elsewhere in the session, Ms Sackman was asked by Liberal Democrat MP Vikki Slade about “AI-driven legal tools”, which were not currently in the scope of the Legal Services Act.
“Given that so much is happening, is that sustainable?” Ms Slade asked.
Ms Sackman replied that she always asked the legal regulators in their regular meetings about areas of risk and vulnerability. AI was “one of the areas we’ve spoken about”, in relation to both consumer protection and innovation.
She described AI as “one of several areas of challenge” for the Legal Services Act and said that “no doubt it will come out as an area of focus in the forthcoming review of the LSB [Legal Services Board]”.
Pressed by Ms Slade on whether she agreed with “such things being in the scope of regulation in the future”, Ms Sackman replied: “Of course I’ve got to be open to that.”
But she added that was not the same as saying “we’re going to do a wholesale review of the legislative framework” – having previously indicated that the case for one was growing.
On the idea of a National Legal Service to replace the civil legal aid scheme, as proposed by the Legal Aid Practitioners Group, or at least a “single national badging”, Ms Sackman said she was “attracted” both to this and to the creation of a national strategy for legal support.
She said that, once the government has seen the “green shoots” of its investment in the justice system, “we have to be bold and open our eyes to the possibility of re-examining what access to justice means in this country”.
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