Litigation Funding Agreements (Enforceability) Bill [HL]

Lord Arbuthnot of Edrom Excerpts

2nd reading
Monday 15th April 2024 Lords Chamber

[Lord Arbuthnot of Edrom (Con)]

My Lords, I declare my interest as a member of the Horizon Compensation Advisory Board. I am grateful to my noble friend the Minister, and to the Lord Chancellor, for securing a slot so quickly to right the consequences of the PACCAR judgment. I am impressed and surprised at the speed with which they have managed to do this. I am also grateful to my noble friend Lord Sandhurst, the noble Lord, Lord Carlile, and the noble and learned Lord, Lord Thomas—whom it is an honour to follow—for encouraging the Lord Chancellor in his speediness by moving amendments to an earlier piece of legislation.

I speak briefly to point out the sad fact that, until Alan Bates secured litigation funding in the Post Office Horizon scandal, the political process had completely failed him and other sub-postmasters. Although a substantial number of MPs, including a Cabinet Minister, Oliver Letwin, had gathered together to say that the concerns about the Post Office’s behaviour had to be independently examined, we got nowhere. Subsequently, Post Office Ministers said that they were lied to and MPs said the same thing. The turning point in the story was the fantastic judgment of Mr Justice Fraser, as he then was. I pay tribute to him. He succeeded in “blowing the bloody doors off” where the politicians had failed. That is why litigation funding is essential.

There will be questions about how litigation funding should work. Many of them will come up during this short Bill. For example, it is regrettable that the 555 sub-postmasters failed to recover their full costs from the Post Office. It was certainly regrettable that, out of a settlement of £57 million, after legal and litigation funding costs only £12 million found its way into the pockets of the sub-postmasters.

However, I do not say that the litigation funders were unfairly recompensed. They took the immense risk of taking on the country’s most trusted brand, the Post Office, which was backed by the bottomless purse of the taxpayer. That was a risk that needed a high pay-off if it succeeded, because it would have been ruinously expensive for the litigation funders if it had failed. We know, and we watched, how the Post Office did its best to spend the sub-postmasters into submission in a disgraceful display of legal bullying, so the litigation funders deserved their fees.

Yet the entire story must make us wonder whether there could be a better way. Litigation is slow and expensive. I found the comments of the noble Lord, Lord Mendelsohn, very interesting in this respect. Litigation funding must be one method of obtaining redress, but it should be considered alongside others, including the model of regulators-plus-ombudsmen recommended in various books by the chairman of the Horizon compensation advisory board, Professor Christopher Hodges, who is a friend of mine, with a properly regulated system of litigation funding that is subjected to what the noble and learned Lord, Lord Thomas, says. Regulation is needed, and with a stronger system of ombudsmen for the public sector, maybe we could avoid another Post Office scandal.