By Sam Tobin
LONDON (Reuters) – Britain’s litigation funding industry faces “seismic consequences” if an appeal over funding agreements is allowed by the United Kingdom’s Supreme Court, lawyers for an industry body warned on Thursday.
Truckmaker DAF is challenging funding agreements entered into by two claimant groups which brought lawsuits over the company’s involvement in a 14-year cartel to fix prices and delay the adoption of cleaner engine emissions technology.
It is facing two cases at the Competition Appeal Tribunal in London brought on behalf of owners of trucks who are said to have suffered loss because of the cartel, for which the European Commission fined DAF 753 million euros ($803 million) in 2016.
The case brought by the Road Haulage Association (RHA) was given the go-ahead last year. A separate case brought by special purpose vehicle UK Trucks Claims Limited was not certified, though that decision is subject to appeal.
DAF’s lawyer Bankim Thanki told the Supreme Court in London on Thursday that the agreements – which entitle the funders to a share of any damages – are unenforceable as they do not comply with rules governing so-called damages-based agreements.
He added in written arguments that any wider implications for the litigation funding industry are irrelevant to the appeal.
But the Association of Litigation Funders, an independent industry body which has intervened in the case, says a win for DAF would leave funded litigation “in a state of disarray”.
The group’s lawyers argued in court filings that allowing the appeal would pose an existential threat to the UK’s collective proceedings regime – which are roughly equivalent to class actions in the United States, but only available for competition law cases.
The RHA’s lawyer PJ Kirby said in written arguments that all 23 current collective proceedings in the UK are brought with the support of third-party funding.
He added that litigation funding is vital to the viability of collective lawsuits and that allowing DAF’s appeal could limit access to justice.
(Reporting by Sam Tobin; Editing by Bernadette Baum)
