ARTICLE
14 January 2025

Litigation Radar 2025

LS
Lewis Silkin

Contributor

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This guide aims to provide you with an in-depth understanding of the evolving landscape of litigation, highlighting significant legal decisions, proposed reforms and the role of emerging technologies.
United Kingdom Litigation, Mediation & Arbitration

Consultation on litigation funding

In the well-known decision of the Supreme Court in the PACCAR case ([2023] UKSC 28), it was decided that litigation funding agreements which entitle the funder to recover a percentage of damages awarded are Damages Based Agreements and are accordingly unenforceable unless compliant with the DBA Regulations 2013.

In response to this, the Conservative Government introduced the Litigation Funding Agreements (Enforceability) Bill, which was intended to have the effect of reversing the decision. In short, the proposal was to add a carve out for litigating funding agreements in existing legislation as follows: "an agreement is not a damages-based agreement if or to the extent that it is a litigation funding agreement". (You can read more about the background in our article.)

However, the Bill did not make it into law before the end of the Parliamentary session in May 2024.

The incoming Labour Government did not introduce the Bill again in the new parliamentary session. The Lord Chancellor instead invited the Civil Justice Council (CJC) to establish a review of litigation funding and the new Government will be waiting for the outcome of this before taking action. The CJC's Litigation Funding Working Group published an interim report and consultation on 31 October 2024, which is open until Friday 31 January 2025.

The review will consider the background to the development of third party funding, the current position regarding self-regulation, approaches to third party funding in other jurisdictions and how third party funding sits within the broader context of funding options. Points of consideration for potential recommendations for reform have also been set out by the CJC, including whether third party funding should be subject to regulation.

The Working Group's final report is expected in summer 2025, which will provide advice to the Lord Chancellor and will make recommendations for change.

New and updated PreAction Protocols (PAPs)

Phase Two of the CJC's final report following its review of PAPs was published in November 2024. This follows on from the first part of the report, which recommended that (amongst other things) a new, General PAP should be introduced.

Shortly before the second part of the report was published, amendments were made to the Civil Procedure Rules (CPR rules 1, 3, 28, 29 and 44) to put greater emphasis on Alternative Dispute Resolution and the power of the court to require parties to engage in ADR, following the decision in Churchill in 2023. (Read the background in our article.)

In line with this, the executive summary of the report emphasises that "pre-action protocols play a crucial role in facilitating proportionate dispute resolution in a justice system where very few cases ever require judicial adjudication on the merits". Accordingly, recommendations are made with this function in mind, helping to ensure that the PAPs "contribute towards a fair settlement of the dispute, or a narrowing of the issues and more proportionate litigation where settlement is not possible".

The report recommends that all PAPs which include a dispute resolution obligation be amended to reflect the above developments, but that if parties engage in a formal ADR process with the assistance of a third party at pre-action stage, then those parties should be exempt from any automatic requirement to engage in mediation after issuing proceedings. This would be to avoid duplication, although it would be subject to the court's discretion.

Also worth mentioning is the recommendation that the PAP for Judicial Review should prompt the parties to judicial review (the process of which does not typically involve or lend itself to ADR) to confirm in pre-action correspondence whether or not they have considered and are willing to engage in ADR. If ADR is appropriate, the PAP should encourage this.

The report makes a number of other recommendations for reform of some litigation specific PAPs and recommends the creation of two new PAPs.

One of the new PAPs recommended is for claims on the multi-track in the Business and Property Courts (B&PCs). This follows concern from practitioners that a General PAP would not be suitable for high value commercial litigation typically seen in the B&PCs, and a subsequent consultation.

A draft PAP has been appended to the report. It is proposed that this PAP would be mandatory, but with some exceptions such as urgent cases, where parties have already engaged in a process to seek to resolve their dispute or if the parties agree in writing to opt out. Continuing the ADR theme, when the PAP applies, the current draft would require parties to engage in a pre-action dispute resolution process, either between the parties directly or using a third party. There is also a proposed 'stocktake' procedure, whereby parties which are unable to resolve their dispute are encouraged to review their positions and continue to consider how to narrow the issues.

As set out in the report, it is now for the Civil Procedure Rule Committee, and in some cases, the Online Procedure Rule Committee, to consider how to take forward the recommendations made by the CJC in both phases of their report. Sir Geoffrey Vos, Master of the Rolls, Head of Civil Justice and the Chair of the CJC has expressed his hope that the implementation of the recommendations will be prioritised.

Litigation reforms in the pipeline

There are important developments in the pipeline following work by the CJC and CPRC in relation to costs, enforcement, interim remedies and security for costs, and non-party access to court documents.

CJC

The primary role of the CJC is to advise the Lord Chancellor, the judiciary and the Civil Procedure Rule Committee on civil matters. It keeps the civil justice system under review and considers how to make it more accessible, fair and efficient. Aside from its work on litigation funding and pre-action protocols (see above), the current work of the CJC which should be on your radar for 2025 includes the following:

  • Enforcement – The Enforcement Working Group is reviewing the policy landscape for enforcement of domestic judgments and is looking to identify and recommend any areas of further enquiry. A call for evidence has closed, which included questions regarding barriers to enforcement, the most and least effective methods, proposed amendments to the enforcement process that should be considered and the ease of obtaining information about potential judgment debtors. A wide-ranging report is expected evaluating enforcement and how to improve the processes.
  • Costs – Following on from a previous costs review and report, the costs Working Group is currently focussing on issuing guidelines in relation to counsel's fees (looking at how to bring them into the costs framework which applies to solicitors) and introducing a new top rate for complex commercial work in the guideline hourly rates. A report containing recommendations will be made to the Master of the Rolls who issues the cost guidelines.

Civil Procedure Rules Committee (CPRC)

The CPRC is responsible for making and amending the Civil Procedure Rules. The CPRC seeks to make the civil justice system accessible, fair and efficient and ensure that the rules are simple and easy to understand.

  • Access to court documents by non-parties – There was a consultation in 2024 on proposed revisions to CPR 5.4C which would widen the scope of documents which could be made available publicly at an earlier stage. A large number of consultation responses were submitted, which expressed concern as to: (i) whether the proposed drafting of the new rule was intended to give such wide access as it would do; (ii) the timing of the provision of documents; (iii) the proposed use of the documents obtained; (iv) the apparent retrospective application of the new rule; and (v) the mechanics of the provision of the documents. The plans have been paused to enable the Transparency and Open Justice Board, established in 2024, to conduct the first phase of its work. On 6 December 2024, the Board published a message detailing their proposed key objectives and inviting engagement. One of the proposed objectives is "timely and effective access to the core documents relating to the proceedings held by the Court or Tribunal", the proposed extent of which appears to be narrower than that proposed in the original consultation. There will be more to come on this in 2025. In the meantime, the Court of Appeal in Moss v The Upper Tribunal & ors [2024] EWCA Civ 1414 has considered the principle of open justice and non-party access to court documents
  • Interim remedies and security for costs – Reforms to CPR Part 25 are to be incorporated into the next mainstream CPR update. Subject to final drafting, Part 25 will be restructured into a more logical order, the two Practice Directions will be dispensed with and revised model search and imaging order will be provided. Parties seeking urgent relief, such as injunctions and freezing orders should be aware of these changes.
  • Costs budgeting light – An earlier report identified areas in which a "costs budgeting light" approach may be appropriate. Drafts of two new costs budgeting pilots have been prepared, one for cases within the B&PCs and one for certain other cases valued at less than £1m (both subject to exclusions). A new Precedent costs form has also been proposed (modelled on Precedent H). It is understood that the pilots should start early in 2025.
  • New Supreme Court and Privy Council rules came into force on 2 December 2024 plus new websites have been created for both courts in order to make access to their resources and rules a better user experience

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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