General Election - The Litigation Edition

The upcoming General Election means that Parliament has now been dissolved and the “wash up” to get as much legislation passed as possible in advance of the prorogation has now happened. So where does that leave the proposed legislation?

This article looks in brief at these affected laws and the potential implications on litigation in England and Wales.

1. Litigation Funding Agreements (LFAs) and the PACCAR Bill

We wrote about the ruling in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others in August 2023 and how the judgment significantly impacted the enforceability of certain litigation funding agreements (“LFAs”). By way of brief recap, the court determined that some LFAs are, in fact, damages-based agreements (“DBAs”), which subjects them to stringent regulatory conditions.

We wrote a follow up article in March 2024 which looked at the Litigation Funding Agreements (Enforceability) Bill (“the PACCAR Bill”) which was introduced on 19 March 2024 to counter the effects of the PACCAR decision. The aim of the PACCAR Bill was to clarify the distinction between LFAs and DBAs and restore the enforceability of LFAs without the need for any additional regulatory compliance. 

The Bill is only at the report stage currently having only passed the second reading. Following the announcement of the General Election, it is unlikely that this Bill will be prioritised this year.

The delay in the PACCAR Bill’s journey through Parliament will add to the current uncertainty around litigation funding, which could adversely affect a number of litigants who rely on such funding agreements to enable them to access justice. 

It will be interesting to see where the PACCAR Bill sits once Parliament is recalled following the General Election, as the outcome will directly impact clients' funding strategies.

2. Arbitration Bill

The Arbitration Bill, aimed at increasing the UK's competitiveness as a global arbitration hub, has also been delayed. The Arbitration Bill includes measures which are designed to simplify existing arbitration procedures, narrow the grounds for challenging arbitral awards, and enforce emergency arbitrators' decisions. 

Further clarification is needed on the specific point of governing law of arbitration agreements, which has stalled the Arbitration Bill’s progress.

The enforced delay in the Arbitration Bill’s passage through Parliament means that the anticipated changes to the arbitration framework will not occur this year. 

The delay underscores why clients should be advised on the current arbitration landscape and preparing for potential changes once the Arbitration Bill is revisited by the next government in due course. It is of course obvious to point out that it remains an unknown as to what priority the Arbitration Bill will be given once the new government is formed.

3. Digital Markets, Competition and Consumers Bill

In contrast to the previously discussed bills, the Digital Markets, Competition and Consumers Bill successfully passed into law through the “wash up” and the Digital Markets, Competition and Consumers Act (“the Act”) is expected to come into force later in 2024 although no exact date has yet been communicated. 

The Act establishes a competition law framework for digital markets and strengthens the enforcement powers of the Competition and Markets Authority. The Act specifically targets large technology companies and represents a major reform in competition and consumer protection laws. 

The Act ensures that consumers have greater control and clarity over online purchases. It mandates businesses to provide transparent information prior to entering subscription contracts, offer reminders about trial periods ending, and facilitate easy contract exits.

Businesses are now required to include unavoidable hidden fees in the initial cost or display them clearly at the start of the purchase process. This measure aims to provide consumers with a clear understanding of their total expenditure from the beginning.

Given the increasing regulatory scrutiny on digital markets, this is a new legal landscape to navigate and advise clients on compliance with the updated competition and consumer protection regulations.

Non-compliance with the Act could result in significant fines.

Conclusion

The delay in legislative processes due to the upcoming General Election poses several challenges and uncertainties for litigants, litigators, funders and advisors. The postponement of the Litigation Funding Agreements (Enforceability) Bill and the Arbitration Bill in particular could impact clients' ability to secure funding and navigate arbitration procedures effectively. On the other hand, the Digital Markets, Competition and Consumers Bill has been successfully enacted, indicating significant changes in regulations that clients must be prepared to address in the short term.

At a time of significant news content it can be easy to overlook the changes which have come into force which may have slipped under the radar or not even made the main headlines and affected parties are reminded it is essential to ensure they comply with the relevant legislation as it becomes relevant and applicable to them.

Sign up here to our mailing list to get the latest General Election content.