54 | Weil, Gotshal & Manges LLP LITIGATION TRENDS 2024 | 55 T O C E M P A N T I I P C A P R O W C C O N T A C T I N T A P P P A T C C L S E C prohibition on discrimination in arbitration. In support of this, they cite evidence of discrimination within the arbitral process, for example on procedural measures, participation within the tribunal, or the representations of parties. The Law Commission deemed this unnecessary, noting that the 1996 Act already includes sufficient safeguards. If an arbitrator acts in a discriminatory manner, they may be removed under section 24 of the 1996 Act. Further, a failure to be fair could constitute a serious irregularity, leaving any resulting award susceptible to challenge under section 68 of the 1996 Act. 4. Clarification of court powers in support of arbitral proceedings Section 44 of the 1996 Act provides the court with power to make orders in support of arbitral proceedings, such as orders for the preservation of evidence or freezing injunctions. The Bill proposes that section 44 be expanded to allow the court to make orders against nonparties, to the extent equivalent orders would be available in civil litigation. Further, a full right of appeal has been added to any non-parties against whom an order has been made. Road Haulage Case Puts the Brakes on Third-Party Funding of English Legal Disputes Having overcome initial skepticism and historic public policy concerns, thirdparty funding has emerged in England as an increasingly popular vehicle through which parties opt to finance and manage risks arising from legal disputes. Recent third-party funding involvement in headline cases, such as the Post Office/Horizon scandal, as well as record levels of financial investment, have resulted in increasing use of third-party funding in both English litigation and arbitration. However, last year, the industry faced a potentially significant setback when a United Kingdom Supreme Court (“UKSC”) decision threatened to invalidate many existing third-party funding arrangements. PACCAR ruling In July 2023, the UKSC plunged the third-party funding industry into uncertainty as a consequence of its decision in R (on the application of PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28. The Court ruled that litigation funding arrangements (“LFAs”), under which funders typically finance the costs of a dispute on the basis that they will receive a percentage or portion of any damages awarded (irrespective of whether they played an active role in the conduct of the litigation) may fall under the statutory definition of damages-based agreements (“DBAs”). This matters, because LFAs which are held to be DBAs but do not meet the relevant regulatory requirements will likely be unenforceable. The ramifications of the decision, if further judicial or legislative clarity are not forthcoming, were initially expected to be far reaching. In her dissenting judgment, Lady Rose noted that the Court’s finding was likely to “invalidate most if not all LFAs that have been agreed since litigation funding began”, leaving funders scrambling to review and, where necessary, amend their funding arrangements at the risk of forgoing any future recoveries. Application to English-seated arbitration While initial coverage of the decision focused on its impact on court litigation, it is likely to apply equally to English-seated arbitration. As such, many funders are also seeking to re-negotiate their arbitration funding arrangements, so as to protect their investments until further clarity is available. PACCAR was considered summarily in the context of arbitration in Therium International Arbitration While the Arbitration Act 1996 continues to operate effectively, the Law Commission recently recommended that it be fine-tuned so as to remain “state of the art,”…which will introduce several significant changes. I N T
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