Cases like Mr Bates vs the Post Office must be funded

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The writer is UK Lord Chancellor and secretary of state for justice

The Horizon scandal is one of the biggest miscarriages of justice in British history, with hundreds of sub-postmasters and postmistresses wrongly convicted of theft, fraud and false accounting — all based on the calculations of faulty software.

Many went to prison. Others lost their homes, friends and even family. All were disgraced, their reputations left in tatters.

For some, the humiliation and injustice was so great that they were driven to suicide. Those who fought on faced an uphill battle against the Post Office, with all its legal and financial firepower.

Alan Bates was one of the postmasters who tenaciously led that charge but, writing in the FT recently, he argued that a legal challenge would be difficult to mount were a similar situation to arise today.

That’s because, having lost their livelihoods, he and his colleagues relied on a litigation funding arrangement to bring their case. These agreements allow for investors to pay up front legal costs in exchange for a portion of any compensation, should a claim be successful.

They have enabled some of the most famous David and Goliath cases of the past decade — including the women who brought equal pay action against Sainsbury’s, the motorists bringing claims against car manufacturers over faked diesel emissions, and the cases against the UK’s biggest mobile phone networks for overcharging loyal customers.

For many claimants, litigation funding agreements are not just an important pathway to justice — they are the only route to redress.

Last year, however, the Supreme Court ruled on a technicality that they were unenforceable, rendering them invalid. This decision not only has the potential to slam shut the doors of justice, it has wider economic implications too.

It creates uncertainty, harms investment in the UK and damages our international standing for legal services. Our legal sector is rightly respected the world over — and is second in size only to the US. But if this ruling is allowed to stand, the UK’s attractiveness to international businesses could wane, diverting the £34bn that legal services contribute to our economy each year to international competitors who will be only too happy to benefit.

I will not allow that to happen and so I will shortly introduce new legislation to restore the position that existed before the Supreme Court ruling and ensure cases can continue being funded.

At the same time, we will work to reform and improve the current arrangements. As things stand, there is no cap on how much compensation investors can request through funding agreements. In the Horizon case, the claimants — who let’s not forget had little money and little redress for what had happened to them — agreed to give 80 per cent of their damages. That meant those who funded the case received £46mn of the £58mn awarded. That left each individual claimant with around £20,000 each — a fraction of the total award.

This government agrees that we need to strike the right balance between access to justice and fairness for claimants. That’s why we are considering options for a wider review of the funding sector — and of what safeguards could be put in place for people who need financial backing to bring claims to court.

Access to justice is a core pillar of this country’s legal system and a central part of the mission that drove me from the Bar into politics. It’s about ensuring that justice is available to all, and not merely the preserve of those with deep pockets.

With this change to the law and through the review, I’m determined to make sure claimants like those caught up in the Horizon scandal can continue to get the justice they deserve — and that David can still take on Goliath.