Former MP Praises PACCAR Ruling, Says Litigation Funding is a ‘Destructive Industry’
Within the litigation finance industry, the consensus reaction to last year’s UK Supreme Court PACCAR ruling was largely one of disappointment. However, for those individuals and lobby groups that are opposed to the widespread use of third-party litigation funding, it has been warmly welcomed as an important corrective measure. In an opinion piece on Law.com, the executive director of Fair Civil Justice, and former MP, Seema Kennedy argues that the Supreme Court’s decision in the PACCAR case ‘should mark the beginning of steps to rein in this destructive industry.’ She describes the ruling as having been a desirable outcome for the UK’s legal system, and one that ‘clips the wings of investors gambling on the outcome of competition class actions.’ At the core of Kennedy’s column is the argument that in a fair legal system, any lawyers or third parties representing a claimant must share their interests. In her view, ‘allowing an outside third party to have a financial stake in any case’s outcome inherently creates conflicts of interest.’ Kennedy delineates between the system of ‘strict legal and professional standards’ that lawyers operate within, and the world of litigation funding, which she argues is ‘ripe for exploitation and abuse.’ Kennedy argues that the Supreme Court’s decision should only be considered a first step in the process of increasing oversight and regulation of third-party litigation funding. She goes on the suggest that, ‘safeguards could include licensing of funders, disclosure of funding agreements to the court, and making sure claimants get a fair payout. As LFJ has previously reported, Kennedy has been a regular critic of litigation funding in the past, having previously blamed third-party funders for contributing to what she describes as the UK’s shift towards an ‘aggressive profit-driven litigation culture’.
