My Lords, I start by declaring my interest as a partner for some time in the global commercial law firm DAC Beachroft LLP. I welcome the important amendments in the name of my noble friend Lord Hodgson of Astley Abbotts, which were spoken to so eloquently by my noble friend Lady Noakes. I also follow my noble friend Lord Eccles in saying that we have to be very careful indeed about how we proceed with this particular aspect of the legislation.
I welcome in particular Amendment 66, which to my mind has the effect of making sure that it is the consumer’s rights that are being advanced and that we are not simply creating a fresh breeding ground for claims management companies. We have to heed the lessons learnt in the United States, where actions are brought for consumer remedies in the name of consumers who know little or nothing of them. However, as I understand it, not even the United States has rules permitting such actions to be brought by someone who does not have some sort of direct interest. I strongly believe that we should be very cautious indeed with that concept. The current systems of funding litigation are riddled with risks of conflicting interests, between, on the one hand, those seeking compensation and, on the other hand, those promoting litigation. In this latter group I would include claims farmers who
want their cut, and litigation funders who essentially see litigation as an investment opportunity—a way of generating a return on their capital. That return comes out of the damages otherwise payable to the claimants.
I cannot see any reason why people in this category of backers should be able to stand as representative claimant. It flies in the face of common sense. Even if we are to be told that these problems will be ironed out in regulations or draft rules, I for one would expect to see such prohibition controlled by Parliament on the face of the statute. Likewise, lawyers who stand to gain from running cases should not be allowed to represent the claimant group and then act for themselves—if nothing else to avoid the maxim that a lawyer who acts for himself often has a fool for a client. I do not want to go too far down that road, except to stress that the risks of allowing lawyers to be the representative claimant are obvious.
That is graphically illustrated by a current piece of legislation. Thousands of Nigerians are suing Shell over an oil spill in the Niger delta and have found themselves embroiled in a dispute in the High Court as to which firm of solicitors is representing them. Without going into too much detail, I refer my noble friend the Minister to that case. Action is being taken by one law firm, Leigh Day, against CW Law Solicitors, based in London. It warns us about the dangers of going down this road. If I am allowed to add another example: Leigh Day is now facing legal action in the Kenyan courts over claims that a number of the torture victims it represented were fictitious. I do not begin to know on whose side justice lies, but it is a fact that the Law Society of Kenya is taking that firm to court. That demonstrates the dangers of allowing this sort of legislation to take hold.
I hope that my noble friend will be able to give us a lot of reassuring words either now, before we conclude this debate, or in a subsequent meeting. I strongly support the case put forward by my noble friend Lady Noakes.