Opt-out Collective Court Actions and Connected Litigation Funding

Debate between Lord Lemos and Lord Carlile of Berriew

Thursday 3rd September 2026 Lords Chamber

[Lord Carlile of Berriew (CB)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper and I declare the interest of having some professional involvement in collective actions.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Lemos) (Lab)]

The Government recognise the critical role litigation funding plays in supporting access to justice and the need for such arrangements to be fair, transparent and commercially viable for funders. To support these aims, the Government have accepted the Civil Justice Council’s two key recommendations. First, we will legislate to mitigate the effects of the PACCAR judgment. Secondly, we will introduce proportionate regulation of litigation funding agreements. We will implement these changes when parliamentary time allows.

[Lord Carlile of Berriew (CB)]

I am grateful to the noble Lord for his reply. He is aware, and the House will be aware, that collective actions give consumers the power to pursue legal actions for which they cannot obtain legal aid, however egregious the wrongs that have been committed against them. Why is it that the Government have broken a promise made before the last election, in 2024, that a Bill of about two or three pages would be produced to reverse the unintended effects of the PACCAR case, so that such actions can be brought and the legal funding industry, which is making a great contribution to the British legal world, can proceed with such cases?

[Lord Lemos (Lab)]

We are committed to legislating. I hear the noble Lord’s concern about that, but I want to reassure the House that we are committed to legislating when parliamentary time allows. We are working urgently to identify a new legislative vehicle to take this forward. Legislation will clarify that litigation funding agreements are not damages-based agreements, and this will mitigate the effects of the PACCAR judgment.