Question to the Ministry of Justice:

To ask His Majesty's Government what assessment they have made of the protections available to consumers who seek compensation via class action lawsuits offered by lawyers and litigation funders.

The Government, in conjunction with other bodies such as the Civil Justice Council (a statutory advisory body), professional bodies and regulators, keeps the civil justice system and regulatory framework under review to ensure it is operating effectively, fairly and transparently.

Protections for consumers who seek compensation through collective action litigation are provided through the legal and regulatory framework governing legal services. The Solicitors Regulation Authority (SRA) independently regulates solicitors and most law firms in England and Wales, including those advising consumers in collective action claims, and requires them to comply with professional standards to protect consumers. This includes duties to act in clients’ best interests, to provide clear and transparent information about costs and risks, and for firms to maintain effective complaints-handling procedures to allow consumers to seek redress. Where appropriate, consumers can also refer their complaints to the Legal Ombudsman, which considers complaints about the standard of legal services provided.

We are aware of concerns around fairness and transparency in cases funded by third-party litigation funders, many of which are collective action cases. In light of these concerns, the Civil Justice Council carried out a thorough and wide-ranging review of litigation funding which has been critical in informing our policy development in this area. As recommended by the Council, we will introduce a new regulatory framework aimed at enhancing claimant protection, transparency, and the effectiveness of the litigation funding market. We recognise the critical role third-party litigation funding plays in access to justice. That is why we are committed to ensuring it works fairly for all. We will outline next steps in due course.