LSB calls for mandatory regulation of litigation funding, MoJ to consider private prosecution reform, SRA chief executive to retire
THE HOT STORY
LSB calls for mandatory regulation of litigation funding
The Times ?
The UK's litigation funding sector is facing calls for regulatory oversight amid concerns over poor practices. The market, valued at approximately ￡4.5bn, has seen rapid growth alongside reported abuses in consumer actions. Richard Orpin, head of policy at the Legal Services Board, said that this growth has "coincided with an increase in poor practice by some law firms in receipt of that funding." He warned that "poor standards of client care" and "short-term financial gain" are jeopardising client interests. The Civil Justice Council is currently consulting on potential regulations, and Orpin is advocating for mandatory oversight by the Financial Conduct Authority. Richard Blann from Lloyds Banking Group echoed these concerns, saying that self-regulation has been "ineffective and inadequate."
LAW
MoJ to consider private prosecution reform
London Evening Standard ?
The Ministry of Justice is to consult on a shake-up of private prosecutions in the courts of England and Wales in the wake of the “catastrophic failures” of the Post Office and Single Justice Procedure scandals. “Recent catastrophic failures in private prosecutions have highlighted that our current system is open to abuse,” said Lord Chancellor Shabana Mahmood. “That cannot be allowed to continue. We will listen carefully to the feedback from this consultation and develop stronger safeguards for the public to restore confidence in our justice system.”
SRA chief executive to retire
Paul Philip, the chief executive of the Solicitors Regulation Authority (SRA), will retire towards the end of 2025 after a 12-year tenure. His departure comes amid criticism regarding the SRA's handling of the Axiom Ince collapse, with the Legal Services Board stating that the SRA “did not act adequately, effectively and efficiently.” Additionally, the SRA has faced backlash over the implementation of the Solicitors Qualifying Examination (SQE), which has been marred by technical issues and booking problems. Anne Bradley, SRA chair, acknowledged the “teething problems” and promised to address feedback regarding the candidate experience. Philip remarked: “It has been a privilege to be able to play such a key role regulating in the public interest,” as he prepares to hand over to a successor.
Starmer's battle against Nimbys escalates
Sky News ?
Prime minister Sir Keir Starmer is confronting significant challenges from Nimbys and green activists who are using the Aarhus Convention to delay major infrastructure projects. This obscure international agreement allows individuals and organisations to challenge developments, capping legal costs at ￡5,000 for individuals and ￡10,000 for organisations. As a result, taxpayers are facing millions in legal fees, with delays costing developers hundreds of millions. Andrew Boswell, a prominent challenger, said: "We are holding the government to account," as he stressed the importance of adhering to the Climate Change Act. Teesside mayor Ben Houchen has called for "fundamental reform" to prevent activists from hindering economic growth. Starmer's ability to reform this international treaty remains uncertain, Sky News reports.
Men more likely to contest wills
Daily Mail ?
According to a survey by Lime Solicitors, men are significantly more likely than women to contest a will when they feel inadequately compensated. The survey revealed that 41% of men are willing to challenge a will for a larger share, compared to only 30% of women. Alistair Spencer from Lime Solicitors said: "Whilst it's tough to talk about issues like these, it's infinitely preferable to taking family disputes to court." The findings also indicate that 42% of men depend on inheritances to support their future finances, in contrast to 32% of women.
LEGAL TECH
How to make law firm Gen AI projects a success
Writing for the Global Legal Post, Womble Bond Dickinson’s chief innovation officer Sam Dixon shares his top tips on how to make law firm Gen AI projects a success. He emphasises the importance of choosing the right tool, and in the context of the buy vs build debate highlights the need for a structured tool that integrates well with existing legal technology and UK proprietary legal knowledge. He also stresses the significance of fostering an enthusiastic environment for change, where senior leaders communicate the benefits of Gen AI as an augmentation rather than a replacement.
Lawyers in Walmart lawsuit sued over fake, AI-generated cases
Reuters ?
A federal judge in the United States has ruled that three lawyers who are suing Walmart in a personal injury lawsuit must pay fines totalling $5,000 for citing fake cases generated by artificial intelligence in a court filing.?US District Judge Kelly Rankin in Wyoming said the lawyers - two from national law firm Morgan & Morgan and one from a smaller firm - had an ethical obligation to ensure that the cases they cited were real.?"As attorneys transition to the world of AI, the duty to check their sources and make a reasonable inquiry into existing law remains unchanged," Rankin wrote.?Walmart denies the allegations in the underlying lawsuit, which accuses the retailer of selling a defective hoverboard toy that allegedly caught fire and burned down the plaintiffs' house.?
COMMERCIAL LAW
Copyright law reforms may face review over breaches
Plans to reform copyright law may face judicial review due to potential breaches of international agreements, particularly the Berne convention. Ministers have proposed allowing artificial intelligence companies to use copyrighted works to develop software unless the owners of the works opt out.?Experts, including Mathilde Pavis, a legal and policy expert in AI, intellectual property, and data, argue that the proposed opt-out system for copyright holders is problematic. She says: "Copyright has to arise automatically from the moment of creation." Pavis highlighted that the government has not justified the burden placed on rights holders. Peter Nunn from Mishcon de Reya also agreed that a judicial review challenging the government's proposal was likely. The Copyright Alliance has also expressed concerns, stating that the opt-out undermines the essence of copyright and violates Article 5 of the Berne convention.
Class action claims for ‘competition law breaches’ total ￡160bn
Consumer and environmental class actions have propelled damages in competition cases to over ￡160bn across 60 cases. Experts indicate that since the introduction of US-style legislation a decade ago, these group claims have surpassed all other areas of UK litigation. Currently, 60 collective proceedings are pending with the Competition Appeal Tribunal in London, including a recent claim against Motorola Solutions for over ￡620m. Microsoft faces allegations of licensing abuses, with claims ranging from ￡1.7bn to ￡2.1bn. The rise in class actions reflects a shift towards private enforcement, as noted by Lambros Kilaniotis from Eversheds Sutherland, who said that "private enforcement has an important role in encouraging compliance with competition law." The Consumer Rights Act 2015 has facilitated this increase by allowing "opt-out" class actions.
FAMILY LAW
Guide for parents representing themselves in Scottish family court
Shared Parenting Scotland has published a revised and updated version of its?guide for parents representing themselves in Scottish family court, having already highlighted the significant increase in the number of parents who find themselves compelled to represent themselves in court because of the falling number of solicitors accepting clients on legal aid.?Shared Parenting Scotland chief executive, Kevin Kane, said: “This guide takes them step by step through the labyrinth of procedures and protocols, the forms that have to be filled and the obscure language that might trip up [parents].”
Ruling in complex custody case
Solicitors Journal reports on a significant Family Court ruling on a complex custody case involving parental rights and jurisdictional challenges. The case, which involved former civil partners and their five children, was presided over by Mr Justice Poole, and highlighted intricate issues of parental rights, jurisdiction, and the welfare of children living abroad.
EMPLOYMENT LAW
Labour moves to extend protections for workers
Financial Times ? The Daily Telegraph ? London Evening Standard ? Metro ? The Guardian ?
The government has announced a series of changes to the Employment Rights Bill, which Labour says will provide “the biggest upgrade to workers' rights in a generation.” Business Secretary Jonathan Reynolds revealed that the bill will include around 250 amendments following extensive consultations. Key changes include entitlement to sick pay from the first day of illness, protections against unfair dismissal from day one, and new regulations for zero-hours contracts, which will also apply to agency staff. Unison general secretary, Christina McAnea, said there were huge improvements that had been made to the bill, saying it was “what working people and decent employers have been waiting for.” However, concerns have been raised by Martin McTague, chair of the Federation of Small Businesses, who noted that 92% of members are "very concerned" about the bill's implications for hiring.
Mixing up names of ethnic colleagues is racist
Daily Mail ?
An employment tribunal has ruled that the mixing-up of the names of two ethnic minority men by a white woman constituted race discrimination. The decision arose from a case involving Jaguar Land Rover engineer Abhinav Sharma, who accused his colleague Magdelena Badescu of racism after she mistakenly referred to him by the name of another Indian employee during a team meeting. Employment judge Garry Smart said those from minority backgrounds are often "confused" with others from the same heritage, which can make them feel hurt and offended and "lumped together as a group" rather than being treated individually.
PROPERTY LAW
Housing minister pledges leasehold overhaul
The Guardian ?
The Housing Minister, Matthew Pennycook, has committed to abolishing the leasehold system in England and Wales before the end of the current parliament. This reform aims to address long-standing complaints from the 5m leaseholders facing high service charges and poor building conditions. Pennycook said: “When we get it done, it will have lasting, generational impact in overhauling a system, which is a feudal right.” The upcoming commonhold white paper will propose measures to facilitate joint ownership of buildings, with a draft leasehold reform bill expected later this year. Despite previous promises from former Housing Secretary Michael Gove, progress has been slow, leading to frustration among leaseholders. Pennycook acknowledged this sentiment, saying: “I understand entirely why leaseholders generally are frustrated.”
Surveyor suspended over mansion case
Justin Sullivan, the president of the Royal Institution of Chartered Surveyors (RICS), has been suspended amid an investigation into his involvement in a legal dispute concerning a ￡32.5m mansion in Notting Hill. The suspension follows his self-referral to RICS's standards and regulation board after serving as an expert witness for the seller, William Woodward-Fisher, who failed to disclose a serious moth infestation. The High Court ruled that the buyers, Iya Patarkatsishvili and Yevhen Hunyak, are entitled to a refund due to the undisclosed infestation, which affected their living conditions.
FIRMS
Law firms ditch billable hours
City AM ?
Law firms are increasingly moving away from traditional billable hours to flat-fee billing systems as the costs of legal services soar. Research by Clio indicates that 54% of UK law firms expect fixed-fee billing to rise in the coming year. Sarah Murphy, general manager of EMEA at Clio, said: “Clients are pushing for more predictable pricing structures, and many firms are recognising that hourly billing doesn't always reflect the value of the work delivered.” The integration of AI into legal practices is a significant factor driving the change, with 62% of firms anticipating increased AI use. The shift aims to enhance client satisfaction and align with corporate budgeting needs as general counsels express concerns over rising legal costs.
Legal sector thrives amid uncertainty
City AM ? The Times ?
New research reveals that the legal sector remains robust despite economic uncertainties, with law firms' average earnings growing by 6.1% last year, albeit down from 6.8% the previous year. The average cost per legal professional rose to ￡67,476, driven by increased overhead expenses, which climbed to ￡45,796. Richard Atkinson, president of the Law Society of England and Wales, said: “Despite rising costs and a slowing growth rate, law firms are still performing well.” The sector generated ￡74.4bn in turnover in 2023 and saw a 3.4% increase in the number of solicitors and legal professionals. TheCityUK previously noted the sector's significant contribution of ￡34bn to the UK economy in 2022, representing 1.6% of the UK's gross value added.
CASES
Royal Mail faces ￡1.2bn class action
The Guardian ?
The Competition Appeal Tribunal (CAT) has approved a ￡1.2bn class action against International Distribution Services (IDS), the owner of Royal Mail, for allegedly abusing its dominant position in the bulk mail market. Bulk Mail Claim Ltd, representing around 290,000 customers, claims that Royal Mail's anti-competitive practices led to inflated prices for bulk mail services since 2014. Andrew Wanambwa, a partner at Lewis Silkin, said: “Royal Mail's abuse of its dominant position in the bulk mail market resulted in the overcharging of hundreds of thousands of bulk mail customers.” This legal challenge comes amid a ￡3.57bn acquisition attempt of IDS by billionaire Daniel K?etínsky's EP Group. Royal Mail has previously faced fines from Ofcom for similar violations.
Staley's court challenge
The Observer ? The Sunday Telegraph ?
Jes Staley, the former chief executive of Barclays, is challenging his ban from the City this week. The ban stems from allegations of misleading the Financial Conduct Authority (FCA) regarding his relationship with disgraced financier Jeffrey Epstein. Staley, who lost ￡18m in bonuses due to the ruling, aims to overturn the decision that has severely impacted his reputation. The two-week court hearing will involve testimonies from prominent figures, including Bank of England governor Andrew Bailey and Barclays chair Nigel Higgins. The FCA plans to present extensive evidence, including over 1,200 emails, to support its claims that Staley concealed the nature of his ties with Epstein.