Woodsford welcomes the pro-access to justice decision of the England & Wales Court of Appeal in DAF v The Road Haulage Association & UK Trucks Claims Limited [2021] EWCA Civ 299 that was handed down by the Court of Appeal earlier today (Friday 5th March).

The decision unequivocally confirms that litigation funding agreements cannot be labelled “damages-based agreements” and accordingly do not fall within the remit of the Damages-Based Agreements Regulations 2013 – the legislative change designed to allow risk-sharing UK lawyers a greater share in the financial return from successful claims.

Litigation finance is a key component in effective redress for corporate wrongdoing and the ability to advance claims on behalf of those harmed, not only representative proceedings in the UK Competition Appeals Tribunal but also in wider UK multi-party actions. This decision removes an argument, deployed by corporate defendants, that sought to undermine the funding arrangements put in place to enable such actions to be brought.

The judgment is another welcome example of the most senior courts of England and Wales acknowledging that “Third party litigation funding is now a substantial industry which, although driven by commercial motives, is widely acknowledged to play a valuable role in furthering access to justice.” (para 5).

Woodsford also notes that the Court of Appeal, in acknowledging that the Government has chosen not to bring into force the longstanding s58B, Courts & Legal Services Act 1990, concluded that:

The natural inference to draw…is not that the legislation was a dead letter, but rather that immediate regulation of the third-party litigation funding sector was not considered necessary, and the continuing presence of section 58B on the statute book (albeit not in force) might meanwhile be expected to help maintain standards and act as a deterrent against abusive practices.

The Association of Litigation Funders is charged with the self-regulation of litigation finance in England and Wales and its funder members must comply with ALF’s Code of Conduct.  The Code aims to ensure, amongst other things, that its funder members are sufficiently well capitalised and may not withdraw from a funded claim without good reason.

Woodsford’s General Counsel and ALF Board member Jonathan Barnes commented:

Once again, senior English jurists have been asked to forensically examine the legal and regulatory framework in which litigation funders operate and found that the house is in order.  The good news is that funders can get on with the job of facilitating practical remedies for misbehaviour, by the big as well as the small”.