Litigation Funding Agreements (Enforceability) Bill [HL]

Lord Etherton Excerpts

Committee stage
Monday 29th April 2024 Grand Committee

[Lord Thomas of Cwmgiedd (CB)]

My Lords, I thank the Government again for bringing this matter with such expedition before this Committee. I wish to make two observations. First, I warmly welcome the Constitution Committee’s report, which is helpful and will no doubt help the Government further on the retrospectivity point.

Secondly, I am glad that the noble Lord, Lord Marks, put forward his amendment because it enables us to thank the Civil Justice Council and the Government for putting the terms of reference in such broad forms. As I mentioned at Second Reading, there is a lot of experience worldwide on that, but since then I have discovered more about the position in Australia and hope that the work done by the European Law Institute will in part reflect the substantial Australian experience. The Civil Justice Council will be able to look at that. Having heard what has been said in Australia, one has to take care, as not all are as responsible as the members of the litigation funders’ body. Others are tempted to enter into this area, so one might see that Australia has a lot of experience of how to deal with this, looking not to the creation of yet another regulatory body but to whether the courts themselves, through the Civil Procedure Rules, can be given the powers and guidance necessary to deal with the issues.

No doubt we will return to this in the autumn of 2025 for a very interesting debate.

[Lord Etherton (CB)]

My Lords, I just want to probe the Government to an extent on the involvement of the House once the Civil Justice Council has finished its review. It is an independent body. It is not itself a rule-making body; the rules are made by the rule committee. While I absolutely welcome the opportunity for the Civil Justice Council, with its expertise, to carry out its review, no changes to the rules will be made without a statutory instrument. My question for the Minister is: at what stage in the process will we have an opportunity of commenting on any recommendations made by the Civil Justice Council? That includes, for example, what my noble and learned friend Lord Thomas of Cwmgiedd has just said on whether a recommendation is made to deal with the question of regulation through amendment of the civil justice rules.

[Lord Ponsonby of Shulbrede (Lab)]

I will make the briefest of comments. I welcome the amendments put forward by the Minister. I very much take to heart the point made by the noble Lord, Lord Carlile, that the Bill would be pretty pointless unless there was an element of retrospectivity to it. I read the information that we were sent by the Bingham Centre, which was informative and interesting, and by the Bar Council. I absolutely understand the primary purpose behind this legislation.

The noble Baroness, Lady Bennett, commented on the legal balance in this Committee. I join her, as a non-lawyer; I cannot match her for gender, I am afraid. However, I can talk about the clients who are paying for this. I might have made the point at Second Reading that, by my understanding, the bulk of the people who take advantage of this type of funding would be at the sort of middle to large-sized company where I was chief executive. It is a way of cash management, in essence, because you do not know what litigation is on the horizon and you do not want to spend too much time on the litigation because that takes time away from running the business. So having these ongoing litigation funding arrangements is a way of managing risk. For me, that was the main purpose of occasionally entering into those agreements, rather than the litigation itself.

The other primary point worth repeating is that a lot competitors out there would like this business—Singapore, Australia, Dubai and elsewhere. I was very aware of that when I was running a business. I was regularly approached by people wanting to reach alternative ways of resolving any disputes that may arise.

Nevertheless, given those thoughts from a client’s perspective, I welcome this legislation. The English and Welsh model should be as up to date and competitive as possible. In that sense, I welcome the Bill and the Government’s amendments.