“When businesses or public bodies have done things wrong, there is always a place for redress through the court system - that’s important. However, we see cases which are brought purely as an exercise in making money for the lawyers and funders.”
This month, FCJ Executive Director Seema Kennedy, featured in BBC Business Daily episode “Why are more people suing businesses?”, where she highlighted the consequences of the rapid growth of mass litigation in the UK. During her interview, Seema noted the correlation between the rise of third-party litigation funding and predatory litigation practices, with claimant law firms actively advertising “no-win, no fee” as a risk-free endeavour for consumers. Yet, the reality is that consumers have been left to foot legal bills they never expected in certain cases, as seen in the cavity wall insulation scandal.
The episode also featured Kenny Henderson, Partner at CMS, who explained how changes in competition law have led “phenomenal growth” in class actions. The rise of “opt-out” claims, where claimants are automatically enrolled in class action lawsuits without actively choosing to be involved or even knowing that they are participating in litigation, has amounted to the average UK citizen being a member of 10 class actions. This system allows for law firms and litigation funders to increase the value of the damages to increase their return on investment, with the majority of settlements going to funders and lawyers.
Seema also touched upon the impact of mass litigation on the UK economy, highlighting that the cumulative cost to the UK economy could approach £18 billion, according to the European Centre for International Political Economy. The unpredictability and time-consuming nature of litigation diverts resources from research and innovation.
Conscious of the need to address wrongdoing, Seema emphasised the need for an increased focus on alternative dispute resolution pathways such as ombudsman and mediation services. At Fair Civil Justice, we believe that litigation should be the last resort, not the first port of call. Furthermore, if consumers do go to court, they deserve to keep more of the pound in their pocket, rather than lose the lion’s share to lawyers and unaccountable litigation funders.
Listen to the full programme using the link:
https://www.bbc.co.uk/sounds/play/w3ct6s83
