The Times: “Class Actions and The Row over Litigation Funders”
October 17, 2024
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Today’s Times newspaper features an insightful article that lays bare the serious issues our British legal system is facing due to the exponential growth of class actions fuelled by a largely unregulated litigation funding industry.
In her piece, legal affairs journalist Catherine Baksi questions whether claimant lawyers and litigation funders are facilitating true access to justice for consumers. She highlights the often extortionate fees taken away by these firms to the detriment of their clients, who are the ones that suffered the injustice, and are left with only marginal payouts.
Beyond motives and conduct of claimant law firms, Baksi includes an example in her reporting that highlights the major concerns FCJ has around the lack of transparency in the litigation funding industry.
As noted in a recent FCJ blog, a High Court judge dismissed a £319 million claim for delayed flights brought by an individual on behalf of a potential 23 million British Airways and easyJet passengers, after it emerged that the case was funded by her boss and that the pair stood to make 24 per cent of the claimed £70 million compensation sought. The judge ruled that there was a “lack of transparency” around the claimant’s “motivation, funding and suitability” to represent the class action.
We know that group actions and litigation funding industries have a role to play in the British legal system, but this must be backed up by stronger safeguards for consumers and more transparency about where the funding is coming from.
As our Executive Director Seema Kennedy comments in the article, “When people 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”.
*An earlier version of this article contained references (which have since been removed) to a fee cap imposed by Pogust Goodhead in its paperwork as well as quotes from a High Court judgment about the firm’s costs. These references were based on The Times’ report which we now understand has been corrected.
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The Times: “Class Actions and The Row over Litigation Funders”
Today’s Times newspaper features an insightful article that lays bare the serious issues our British legal system is facing due to the exponential growth of class actions fuelled by a largely unregulated litigation funding industry.
In her piece, legal affairs journalist Catherine Baksi questions whether claimant lawyers and litigation funders are facilitating true access to justice for consumers. She highlights the often extortionate fees taken away by these firms to the detriment of their clients, who are the ones that suffered the injustice, and are left with only marginal payouts.
Beyond motives and conduct of claimant law firms, Baksi includes an example in her reporting that highlights the major concerns FCJ has around the lack of transparency in the litigation funding industry.
As noted in a recent FCJ blog, a High Court judge dismissed a £319 million claim for delayed flights brought by an individual on behalf of a potential 23 million British Airways and easyJet passengers, after it emerged that the case was funded by her boss and that the pair stood to make 24 per cent of the claimed £70 million compensation sought. The judge ruled that there was a “lack of transparency” around the claimant’s “motivation, funding and suitability” to represent the class action.
We know that group actions and litigation funding industries have a role to play in the British legal system, but this must be backed up by stronger safeguards for consumers and more transparency about where the funding is coming from.
As our Executive Director Seema Kennedy comments in the article, “When people 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”.
*An earlier version of this article contained references (which have since been removed) to a fee cap imposed by Pogust Goodhead in its paperwork as well as quotes from a High Court judgment about the firm’s costs. These references were based on The Times’ report which we now understand has been corrected.
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