The government’s Judicial Review and Courts Bill returns to the House of Commons this week. It was initially feared that the legislation would be used to rein in the courts, but recent reports suggest the government has “junked” the more radical reforms. This is no bad thing.
But one area where it was surprising not to see more government action was on the question of how litigation is funded and, in particular, the crowdfunding of judicial review. Crowdfunding—the use of online platforms to raise third-party funds—has become an increasingly prevalent method of raising money to pay for judicial reviews of government action.
I should declare an interest at this point, as my own firm has used this method of funding, for example to bring a claim against factory farming. But some organisations, such as Jolyon Maugham’s Good Law Project (GLP), have been far more proactive in using this funding method to bring strategic litigation, including of an overtly political nature, against Boris Johnson's government. The GLP has used the Crowd Justice platform to challenge issues such as alleged cronyism in the awarding of Covid contracts.
There are potentially good reasons for funding cases in this way. In recent years, access to public funding (such as legal aid) has been restricted so that very few individuals affected by government decisions are eligible. Moreover, the cost of bringing a complex judicial review can be extremely high. Tom Hickman QC has described judicial review as a “Rolls-Royce” process that few can afford, and estimated that a moderately complex claim against the government could easily cost £40,000, with the added issue that a losing claimant is usually liable to pay the defendant’s costs. Factor in the cost of potential appeals, and engaging in public-interest litigation could be an existential threat to a small charity or NGO, which must balance the public interest in bringing a claim with its other aims and objectives.
Yet these difficulties also acted as a discipline against unmeritorious claims. Individuals who qualified for legal aid would also have their claims subject to a merits test by the Legal Aid Agency, which would consider the likelihood of the claim succeeding.
By contrast, litigation which is pursued via crowdfunding is not subject to the same level of control: while it may need to be supported by a lawyer (who will be professionally regulated), the main hurdle it needs to pass to reach the permission stage at the High Court is to be sufficiently popular to attract enough funding to meet the potential costs.
To take the GLP as an example, in its 2020-21 Annual Report, it said that its income had increased to £2.9m, made up mostly of regular and one-off donations and some case-specific donations. The GLP is neither a charity nor a community interest company, but rather a private company limited by guarantee (although it does describe itself as being not-for-profit). Many of its cases have been subject to significant criticism, usually by commentators on the right of the political spectrum.
But my concerns are not aimed at a specific organisation, but rather the lack of adequate regulation across the board. Barbara Rich, a barrister at a leading chancery set, has noted that private companies raising money in this way are not subject to the same type of “supervisory regime of a formal, registered charitable trust,” and that contributors may not be given any information about the chances of a case succeeding, or what will happen if the case is successful.
Even Maugham has acknowledged that there are significant reputational risks involved in crowdfunding, and that there may be a need for “careful regulatory intervention.” Notably, he highlighted the risk that promoters or lawyers may try to “game the system.”
Further concerns arise. The first is that the causes which are most likely to win funding from the public are those which are popular. But this does not mean that they have legal merit. Sometimes it feels like a judicial review is simply being threatened in order to embarrass the government, or obtain a good press headline, with the proposed action mysteriously fading away when problems with the case are discovered.
Second, unmeritorious claims can divert resources, taking up valuable court time. An obvious example is Webster (a 2018 case which effectively tried to halt Brexit). It was brought after the legal deadline had passed, was refused on the papers, and then at an oral hearing. The judgment described the claim as “hopeless and totally without merit,” and stated that “the debate which the claimant seeks to promote belongs firmly in the political arena, not the courts.” Yet the crowdfunding campaign behind the case raised £190,000.
Without an active client, or an alternative use for the funds, there must be a danger that any group, which has raised sufficient money that adverse costs are not a deterrent, can pursue a claim well beyond the bounds of reasonableness.
Crowdfunded cases threaten to drag the courts into the political arena more than is strictly necessary. This is a significant issue and Lord Reed, the president of the Supreme Court, has previously noted that the courts are having to repel cases which are brought on political, rather than legal, grounds.
The courts themselves have questioned whether groups such as the GLP should be given standing to appear in any public law case they wish, and a recent judgment stated that “it cannot be supposed that the GLP now has carte blanche to bring any claim for judicial review no matter what the issues and no matter what the circumstances.”
There is, moreover, no real system in place to protect the interests of donors. As Maugham has noted, the crowdfunding webpages that succeed in raising money “are typically those which most closely align what are said to be their legal objectives with the policy ambitions of a particular audience. This creates a clear moral hazard around mis-selling litigation or over-promising on prospects.”
The lack of protection extends to what happens to the money raised: it is often impossible to return money to donors (save for very large donations). Some organisations may seek donations which are not ringfenced for a particular case, leaving a risk that the money is eventually used to fund a completely different cause, which the original donor may not support. Then there is the question of what proportion of the donated money is pocketed by individuals, which in some cases is far from clear (though in the case of the GLP, its funding model is admirably transparent).
All told, crowdfunding gives rise to a far wider range of problems than more traditional public-interest litigation by charities and NGOs such as JUSTICE, Liberty or Greenpeace. Such organisations are subject to checks, including internal governance systems and accountability to trustees or members.
Given the lack of trust in the current government by many in the legal community, one now has to be careful about proposing additional restrictions on access to justice. Nonetheless, the risk is that this apparently empowering means of providing resources to mobilise the law may ultimately undermine public-interest litigation as a whole. Better to reform early, address the problems and ensure proper standards—before a real scandal emerges.
