Oral Answers to Questions

Julian Smith Excerpts

Tuesday 11th November 2025 Commons Chamber

[Mr Speaker]

Reopen Chorley to help you!

[Sir Julian Smith (Skipton and Ripon) (Con)]

16. Whether he plans to bring forward legislative proposals on litigation funding agreements.

[The Minister for Courts and Legal Services (Sarah Sackman)]

May I thank the right hon. Gentleman for his commitment on this issue? We had an incredibly constructive debate in Westminster Hall recently on the topic of third-party litigation funding. Litigation funding is what enabled Alan Bates and the sub-postmasters to fund their landmark legal action against the Post Office. It plays a critical role in access to justice and a vital role in contributing to our economy. For that reason, I am carefully considering, alongside colleagues, our response to the Civil Justice Council’s review to ensure that we get our reforms right.

[Sir Julian Smith]

I thank the Minister for that answer and for the constructive debate a week or so ago. May I press her on timing—as she said, this is important for consumers, businesses and the legal sector—and test her on the opportunities for early dispute resolution, which were mentioned in the CJC report and which I would encourage the Government to look at seriously?

[Sarah Sackman]

As the right hon. Gentleman will appreciate, the report is incredibly detailed and contains a whole host of recommendations. It is important that we go through that very carefully. We have all seen the uncertainty created by the Supreme Court judgment in the PACCAR case. We are looking at what the appropriate response would be. If we are going to effectively reverse the effect of that judgment, then we want to build back better and get the reforms right so that we can achieve the access to justice and the economic benefit that he so rightly says he is committed to.

Civil Justice Council Review of Litigation Funding

Julian Smith Excerpts

Wednesday 29th October 2025 Westminster Hall

[Carolyn Harris (in the Chair)]

I will call Sir Julian Smith to move the motion; I will then call the Minister to respond. I remind Members that they may make a speech only with prior permission from the Member in charge of the debate and the Minister. There will not be an opportunity for the Member in charge to wind up, as is the convention for 30-minute debates.

[Sir Julian Smith (Skipton and Ripon) (Con) [R]]

I beg to move,

That this House has considered the Civil Justice Council’s review of litigation funding.

It is a pleasure to serve under your chairmanship, Ms Harris. I refer the House to my entry in the Register of Members’ Financial Interests—until the summer, I was voluntary chair of the Centre for Effective Dispute Resolution. I pay tribute to Mr Justice Simon Picken and Dr John Sorabji, who co-chaired the review, along with each member of the working party and the Civil Justice Council secretariat.

Third-party litigation funding plays an important role, enabling citizens in the UK and businesses to bring claims against larger and often better-resourced firms and organisations. Litigation funding involves an investment company that is not involved in a particular legal case providing all or a portion of the legal costs of a claim, in return for any damages awarded. The typical area in which litigation funding operates is in high-value commercial, arbitration or group litigation claims, particularly in the Competition Appeal Tribunal—a key route for competition-based group claimants to attempt to seek redress and, alongside the Competition and Markets Authority, one of two pillars of the UK’s globally recognised competition regime.

Litigation funding provided financial resource for cases to be taken in the initial stages of the Post Office Horizon scandal, Bates v. Post Office, as well as providing resources in cases taken up against car manufacturers, such as one over false diesel emissions, cases focused on data breaches, those involving car financing and, most recently, a high-profile case last week involving Apple and charges for app use on the App Store.

[Luke Akehurst (North Durham) (Lab)]

I thank the right hon. Gentleman for giving way at such an early stage in his speech. I want to highlight another positive example of the use of litigation funding. It was essential in helping 52 former franchisees of Vodafone—essentially, small business owners, including one in Chester-le-Street in my constituency—to bring a claim against the company, which they would have struggled to bring without funding. Does the right hon. Gentleman agree that this example demonstrates that litigation funding can play a crucial role in enabling access to justice for those who would otherwise be denied it?

[Sir Julian Smith]

I agree with the hon. Member; the Vodafone case, which involved franchisees across the UK, is another example of how litigation funding can help.

The Supreme Court’s judgment in the PACCAR case in July 2023, which involved a claim against truck manufacturers for anti-competitive behaviour, rendered many third-party funding agreements unenforceable by bringing them in scope of another type of legal funding agreement, damage-based agreements. The impact of the judgment on the litigation funding market has been two years of instability and a lack of clarity about its contractual operating terms. The last Government sought to remedy the issue by introducing the Litigation Funding Agreements (Enforceability) Bill, which had reached Second Reading in the House of Lords immediately prior to the election.

[Jim Shannon (Strangford) (DUP)]

I commend the right hon. Gentleman for securing the debate; he was right to do so. Although no win, no fee seems like the only reasonable option for those seeking compensation in the civil courts to fund their cases, they can be easily taken advantage of, so does he agree that we need a framework that allows for a reasonable exchange of risk and benefit to consumers, rather than putting the ability to fight for justice just beyond their reach?

[Sir Julian Smith]

I agree with the hon. Member; I will come to some protections that I think he might be attracted by.

The last election stopped the Litigation Funding Agreements (Enforceability) Bill, which was going to overturn the PACCAR judgment, but on 1 August 2024, Lord Ponsonby said in a written answer to a parliamentary question that the new Labour Government

“recognises the critical role third-party litigation funding plays in ensuring access to justice.

Following the PACCAR judgment, concerns have been raised about the need for greater regulation of Litigation Funding Agreements…The Government is keen to ensure access to justice in large-scale and expensive cases, whilst also setting up adequate safeguards to protect claimants from unfair terms.

The Civil Justice Council is considering these questions and others in its review of third-party litigation funding, and hopes to report in summer 2025. The Government will take a more comprehensive view of any legislation to address issues in the round once that review is concluded.”

The Civil Justice Council review concluded in June this year. The litigation funding industry, businesses and the legal sector await the Government’s response. The current lack of response to the report is causing significant uncertainty to the sector and additional costs for those fighting for businesses and consumers. Although the Government are inevitably busy on many fronts, action on this is needed now and will be positive for the UK economy.

I will return to the recommendations of the CJC report shortly, but I just want to emphasise two broader points. First, the legal sector in the UK was worth about £52 billion in 2024, up by about 10% on the previous year. Litigation funding is estimated to have quadrupled since 2013, with more than £1 billion capital estimated as currently available to litigation. In 2023, PwC UK predicted growth at a compound annual growth rate of more than 8% over five years.

On a global basis, the global litigation funding market was approximately $20 billion in 2025 and is expected to be closer to $49 billion in 2035. Legal services with litigation funding are an important component and a vital export opportunity as the UK continues to be the leading centre for global disputes of all kinds and can stand to win significant revenues from deals such as the ones the Government have done with India, the US and, this week, Turkey. Services of all shapes and sizes, but particularly legal services, are a key UK economic sector and we should bear that in mind during this debate.

The second broader point is that litigation finance significantly assists with access to justice, as we have heard, discouraging large companies from anti-competitive or anti-consumer behaviour. Litigation finance funds cases of all shapes and sizes, but particularly class actions where there is a potential case against large and often global firms who unknowingly—or often knowingly —have breached the UK’s competition law.

UK competition law was crafted over many years to ensure an efficient market protecting consumers and fostering fair competition between companies, encouraging better and more effective growth. Both issues matter to UK citizens as they directly impact incomes and financial costs for families across the United Kingdom. We need one of our most successful service sectors to operate with a full focus on expansion and growth. That means more jobs, which mean more tax revenue. We need UK consumers to have routes to take on the huge might of the global companies from which they buy products and services, but that have such large market share and resources that they can more or less do what they want.

The Competition Appeal Tribunal was extended in 2015 by the coalition Government to include opt-out collective actions to enhance competition, ensure prices stay fair and that businesses do not abuse their position and keep innovating. As Ministers said at the time:

“Competition is one of the great drivers of growth”,

For many consumers, who are often on low incomes, cases in the CAT, funded by third-party litigation funding, is the only route to challenge and hold large companies to account.

Neither point is intended to imply that everything is perfect, but the PACCAR judgment and the need for legislation to remediate the situation, the CJC report that is the topic of this debate and a recent call for evidence on the opt-out regime at the Competition Appeal Tribunal, run by the Department for Business and Trade, all risk slowing down an important growth market for the UK if Government responses are not executed quickly, proportionately and with vision. Improvements can clearly be made to the oversight of the litigation funding sector, and also in the operation of the Competition Appeal Tribunal. Having said that, despite heavy lobbying for change, there is no evidence that the UK’s ranking as a destination for foreign direct investment has been affected by our vibrant competition regime. Moreover, private enforcement of the regime through the CAT seems to be good value for money, with just over £5 million in costs for the Competition Appeal Tribunal and £118 million for the Competition and Markets Authority.

The first recommendation of the CJC report is:

“Legislation should be introduced to make clear that litigation funding is…a distinct form of funding”.

It also recommends that the effect of the PACCAR Supreme Court judgment should be overturned. Although the market has, to an extent, adapted to that judgment in June 2023, the bulk of submissions to the review and elsewhere highlighted the impact on the provision of funding. Less money has been delivered to claimants, and there has been a reduction in the number of CAT cases. The report’s main ask is to get legislation in place and to overturn PACCAR. I would be interested to hear the Minister’s response on when that will happen, and a clear timeline. It would be good to get it done in this Session of Parliament. I would also be interested in the Minister’s comments on the change being retrospective, which seems fraught with complications. On the previous Bill’s Second Reading debate in the House of Lords, Members raised concerns.

Other flagship recommendations in the CJC review relate to the move from self-regulation by the Association of Litigation Funders not to the Financial Conduct Authority, which some proposed, but to light-touch regulation put in place by the Lord Chancellor. The proposals are for differential regulations for the type of claimant: very little for commercial disputes, and lighter touch for consumer, representative or class actions.

The review proposes a minimum baseline set of regulatory requirements, focusing on case-specific capital adequacy, codification that litigation funders should not control the litigation process, conflicts of interest and money laundering. Additional light-touch regulation is proposed for groups and consumer claimants, to include a consumer duty, early court approval of the funding agreement and a court assessment of whether the lender’s return is reasonable. Further measures include the provision of independent legal advice for consumers before entering into funding agreements, and a prohibition on litigation funders controlling proceedings or settlement proceedings.

In reflecting on the proposals, the Government must be alive to the risk of fettering an innovative and successful industry that enables consumers to mount challenges against Goliath-sized firms. I encourage them to take a pragmatic view, driven by the market. There may be merit in applying some elements of the CJC report through regulations, but it is worth considering strengthening the current self-regulation regime, including by getting all players operating in the UK market to join the Association of Litigation Funders—it is a self-regulation body has a code of practice, but not all litigation funders are in it. I call on the industry to get everybody operating in litigation funding in the UK on board in the association.

There are proposals to use redress schemes and other forms of non-court-based resolution more regularly. I believe strongly in alternative routes to settlement, so I agree strongly with those proposals. Much more can be done to offer settlement options, including encouraging settlement rather than litigation, offering mandatory mediation in parts of the CAT process, and making mediation a clause within the process for litigation funding agreements. Avoiding costly disputes is generally a good thing. Focusing on settlement, not litigation, in the Government response would help in that regard. Mandatory mediation would also help to ensure that disputes between litigation funders and law firms are handled more clearly.

Although I acknowledge that improvements need to be made, I hope that the Minister and the Government will reflect on the potential motivations of some of those who look to impose heavy changes on opt-out. Opt-out, and its reliance on litigation finance, offers consumers a powerful opportunity for redress. The Government opt-out review, introduced earlier this year, references perceived burdens of the current regime on business, but there seems to be little evidence of our competition law putting off inward investment. The UK is seen to be a great place to invest and the same arguments that helped to build the UK competition rules stand today. If there is no fear of being brought to book, some companies will continue to rip off and abuse consumers. If they are abiding by UK competition law, they have nothing to fear.

While acknowledging that improvements can be made, we should be sceptical of those who seek to fetter consumer rights and should instead make the case for an expansion of those rights in the interests of our citizens and UK economic growth. A strong defence of consumer rights is the best way for the UK to continue to thrive, for the UK economy to grow, and for inward investors and domestic businesses to stay lean and competitive.

Whatever the Minister’s response today, I hope that the Government will soon introduce a Bill to address PACCAR, the primary recommendation of the CJC report, and will seek to look at practical ways to implement elements of that report while avoiding adding burdens, cost and micromanagement on to an innovative and important sector.

[Carolyn Harris (in the Chair)]

I will bring this debate to a close at 4.42 pm. Hon. Members should bear that in mind so that there is time for the Minister. I call Oliver Ryan.

Oral Answers to Questions

Julian Smith Excerpts

Tuesday 3rd June 2025 Commons Chamber

[Sarah Sackman]

Once again, I am sorry to hear about the impact that the collapse of SSB Law has had on my hon. Friend’s constituents and the many others affected. As she says, the Solicitors Regulation Authority is completing an investigation into the collapse. Disciplinary notices have been issued to several individuals and further decisions are expected before the summer. I am happy to provide her with a written update as that investigation is concluded.

[Sir Julian Smith (Skipton and Ripon) (Con)]

I refer the House to my declaration in the Register of Members’ Financial Interests. Litigation finance plays a key role in the legal system in the UK and provides opportunities for postmasters and others to take cases to court. The Civil Justice Council has just published its report on the sector. When will the Government respond to that report?

[Sarah Sackman]

I thank the right hon. Member for his question, and I thank the Civil Justice Council for its work. He will understand that we have not yet had a chance to fully digest the report, but we anticipate acting on its recommendations in fairly short order.

Protection of Prison Staff

Julian Smith Excerpts

Monday 12th May 2025 Commons Chamber

[Sir Nicholas Dakin]

My hon. Friend raises a question about prison maintenance; that is always under review. Contracts were in place when this Government came into office that needed to be taken forward to ensure that our prisons were kept as safe as possible. Those who are assessed as posing a raised risk of violence are supported through a case management approach that is centred around the individual and addresses the underlying causes of their violence, including specific risk factors and needs, to help them manage and move away from violent behaviours.

[Sir Julian Smith (Skipton and Ripon) (Con)]

I support the shadow Secretary of State’s request for accelerating the supply of stab vests. Can I ask the Minister for a bit more detail on the Government’s thinking on the use of Tasers? There is a long track record of Taser use in the UK, and it would seem that we could also accelerate the use of Tasers in prisons as quickly as possible.

[Sir Nicholas Dakin]

I agree with the right hon. Member that this needs to be looked at as quickly as possible. This summer, an operational trial on Tasers will be launched, involving specialised officers, to help staff respond to high-risk incidents more effectively. The findings of the trial will inform any future decisions about the use of Tasers in the prison estate. We need to learn from what we do so that we can get it right in the future.

Courts and Tribunals: Sitting Days

Julian Smith Excerpts

Wednesday 5th March 2025 Commons Chamber

[Shabana Mahmood]

“Flabbergasted” is one way of describing it, and it is probably the only one that you will find to be in order, Mr Speaker, so I shall refrain from using other language. My hon. Friend is a former prosecutor, so she knows whereof she speaks, and I pay tribute to her for the work that she did in her former profession. The message should go out loud and clear to her constituents, and to people up and down the country, that this Government are acting to deal with the Crown courts backlog. We have a plan. We have increased funding, and we are considering the reform that is needed, and has been ducked by too many others, to get the system sorted out once and for all.

[Sir Julian Smith (Skipton and Ripon) (Con)]

I refer the House to my registered voluntary interests.

I welcome the statement. Does the Lord Chancellor agree that one way of getting cash into the criminal justice system is to reduce the cost of the civil system? May I urge her to continue to consider alternative methods of dispute resolution, particularly mediation within the civil system?

[Shabana Mahmood]

The right hon. Gentleman is entirely right. All the mechanisms at our disposal to reduce the cost of people going to court should be on the table, and we have already been acting to try to amplify the availability of mediation and other ways in which issues can be resolved. Going to court is always very expensive, sometimes for the individuals involved and often for the taxpayer, and it is important that we keep bearing down on those costs.