Litigation Trending: 2024 and predictions for 2025

Once again, the commercial litigation team at Ashurst welcomed the New Year with a discussion on the main issues of 2024 and our predictions for 2025. Here we highlight the developments that caught our eye and focus on what to look out for in 2025.

Another big year for 'secret commissions' litigation 

2024 proved to be a big year for so-called 'secret commission' claims. 2025 looks set to be even bigger.

In October, the Court of Appeal handed down its judgment in three motor finance test cases brought by consumers against MotoNovo Finance and Close Brothers. The Court of Appeal sided overwhelmingly with the three consumers, finding that the car dealers owed both a disinterested duty (i.e. a duty to provide information, advice or recommendations on an impartial or disinterested basis) and an ad hoc fiduciary duty (imposing obligations of loyalty and the repose of trust and confidence) to the claimants when arranging car finance (read our briefing on the judgment for more information). 

The judgment has caused consternation within the motor finance and wider credit broking sectors, with certain firms pausing lending. In particular, the obligations the Court of Appeal imposed on car dealers regarding disclosure of commission arrangements and the terms of the dealer/lender relationship greatly exceeded relevant regulatory rules, guidance and long-established industry practice. In other words, firms may be complying with regulatory requirements but still be in breach of their wider legal obligations. 

In 2025, all eyes will turn to the Supreme Court appeal. A three-day hearing has been listed for 1 to 3 April, with judgment expected in Q4 2025. It is anticipated the Supreme Court will undertake a root and branch analysis of the legal principles that apply to secret commission claims. Indeed, the Court of Appeal recognised in a postscript to its judgment that certain of the existing principles did "not sit easily" within these types of scenarios but considered that it was bound by previous authority and therefore unable to "start again from first principles". 

The principles underpinning the Court of Appeal's decision are industry agnostic. Understandably, therefore, the judgment has caused concern across a wide range of other industries in which commissions are paid to intermediaries. In response, we hosted a client webinar in December exploring whether the Court of Appeal's decision in motor finance may have opened Pandora's Box for commission litigation in 2025 and beyond. In summary:

1. On the one hand, secret commission claims are not new. Prior to the Court of Appeal's motor finance judgment, there were already a number of commission-related cases going through the courts from a range of industries (e.g. a high volume of claims against energy brokers). In many of these cases, defendants have been successful at court of first instance level, with the Court of Appeal set to consider the Expert Tooling and Automation Limited v Engie Power Limited appeal in 2025.
2. That said, claimant firms will no doubt be buoyed by the Court of Appeal's decision in motor finance and we have already seen several firms starting to 'book build' secret commission group claims across a range of industries. Pending clarity from the Supreme Court, it may be that these firms use 2025 to prioritise marketing the claims and information gathering (rather than actually issuing them) to ensure they are ready to file should the Supreme Court's judgment prove favourable.
3. As the law stands, the contagion risk is highest where the commissions paid were 'fully secret' commissions (i.e. not disclosed). In these cases, if the claimant can establish that the recipient of the commission owed them a disinterested duty then both the recipient and the payor of the commission will be directly liable under the laws of civil bribery. In contrast, where the commission has been disclosed, claimants will need to establish that the recipient owed them a fiduciary duty (a supposedly higher level of duty) and failed to obtain their fully informed consent to receive the commission.
4. In the meantime, firms who pay or receive commissions may well be reluctant to place too much faith in a Supreme Court u-turn. We therefore expect to see firms evaluating their potential exposure and mitigation options (e.g. by reviewing commission disclosures and considering whether the relationships between intermediaries and end customers may give rise to a disinterested and/or fiduciary duty).

ESG litigation: what do 2024’s decisions indicate we can expect in 2025?

2024 was a significant year for ESG litigation before the English courts. Important decisions were handed down relating to climate change, but also business and human rights issues.

On climate, June 2024 saw the Supreme Court rule on a much-anticipated planning challenge brought in relation to a UK onshore oil project.  The key question was whether a local council had erred by not taking into account the effects of ultimately burning the extracted oil (in other words, Scope 3 emissions) when producing its Environmental Impact Assessment. Earlier court decisions had concluded that emissions from burning the oil did not need to be taken into account in the assessment.  

The Supreme Court disagreed (by a slim 3-2 majority). The effect of this was that the council’s planning decision was unlawful – a decision which had a knock on effect in relation to a number of pending challenges before the courts.

The Supreme Court’s judgment followed a trend seen in the decisions of other courts and tribunals to adopt a climate-friendly interpretation of the law (see, for example, our briefings in May and June). While not all climate litigations have been successful, there is a discernible theme of receptiveness to the sorts of arguments that have prevailed in these cases.

In the business and human rights space, the largest and most high profile group litigation before the English courts – a claim arising from the collapse of the Fundão Dam in Brazil in 2015 – proceeded to a trial of certain liability issues in late 2024. A judgment is expected in 2025.

Earlier, in July 2024, the Court of Appeal handed down a landmark judgment which concluded that the UK National Crime Agency's (NCA) decision not to investigate cotton goods imported from the Xinjiang Uyghur Autonomous Region (the XUAR) of China, which were allegedly produced using slave labour, was unlawful. Although framed as a challenge to a decision by a UK prosecutorial authority, the claim, and the Court of Appeal’s decision, raised far-reaching questions about the interpretation of the UK’s Proceeds of Crime Act. In particular the apparent narrowing of the exemption from liability in the legislation for a person who acquires, uses or possesses criminal property for "adequate consideration", increases the risk profile of supply chains.

The Court of Appeal was also active in permitting mass tort claims arising from activity outside the UK to proceed. Two judgments handed down late in the year illustrated this. In December 2024, the Court of Appeal reversed a High Court decision which had required claimants seeking damages for harm arising from Nigerian oil spills against an oil company to bring their claims on an "all or nothing" or "global" basis. The Court of Appeal took the view that it was not for the courts to require claimants to advance claims of this nature in a particular way – they could formulate their claims as they wished.

In the same month, the Court of Appeal reversed a finding of the High Court in a high-profile ESG supply chain claim brought by migrant workers from Nepal and Bangladesh against a well-known UK manufacturer (see our briefing). The claim had originally been stayed on the basis that it would be more convenient for it to proceed in Malaysia – the jurisdiction where the migrant workers had been allegedly mistreated. But the Court of Appeal disagreed. It concluded that it would be more appropriate for the UK defendants to be sued in England, and that the clear "inequality of arms" between the claimants and defendants pointed towards England as the jurisdiction where justice was more likely to be done.

What themes can be extracted from these cases, which point to how litigation may develop in 2025?

First, climate will remain a contentious issue before the English courts. Traditionally, the battleground has tended to be public administrative law and planning law (as illustrated by the Supreme Court case described above). However, with courts the world over considering a range of climate issues, it is likely that we will see further claims in England, both in public and private law.

Second, NGOs are likely to seek creative ways to draw attention to their causes and develop the law. The NCA judicial review is a good example of this, using the criminal law and a specific aspect of it – proceeds of crime legislation – to draw attention to the situation of the Uyghur people. Such claims can then have a knock-on effect on criminal risk for companies and financial institutions beyond the particular subject matter of the original claim.

Third, even though first instance courts have tended to take a more restrictive approach to environmental and human rights litigation, the Court of Appeal has shown itself to be more amenable to letting litigation proceed in England in a way which favours claimants. Expect claimants, claimant law firms and NGOs to take heart from this, and continue to pursue claims in England which relate to harmful activities and damages suffered elsewhere. 

A make or break year for litigation funders?

Last year started well for funders. In March the government looked set to reverse the controversial Supreme Court decision in PACCAR which effectively rendered most funding agreements unenforceable (read our briefing). The Litigation Funding Agreements (Enforceability) Bill would have restored the position pre-PACCAR, but it did not survive the general election. Funders now have to wait until Summer 2025, and the completion of the Civil Justice Council's review of third party funding, to find out whether PACCAR is to be reversed. Even then, the reversal is unlikely to take effect before 2026. All eyes will therefore be on the Court of Appeal early this year when it hears joined appeals from decisions of the Competition Appeal Tribunal (CAT) on the enforceability of certain litigation funding agreements post-PACCAR.

The findings of the CJC review – expected in Summer 2025 - are eagerly awaited as a signal of future reforms. The comprehensive interim report published in October 2024, and the questions posed, are currently under consultation; stakeholders have until 31 January to comment on various issues, including the regulation of third party litigation funding, the extent to which funders’ returns should be capped, and other available sources of funding. 

The CJC was not the only body to look at funding in 2024. The European Law Institute (ELI) published its 'Principles Governing the Third Party Funding of Litigation' in early October. The 12 principles are intended to constitute a "blueprint for guidance, decisions or light-touch regulation" of the market in third party funding internationally. Importantly it does not recommend regulation as a general approach, which funders will find encouraging, particularly as the ELI research project was jointly led by Mrs Justice Sara Cockerill who also sits on the CJC funding working party. 

Funders' attention will also be on the Competition Appeal Tribunal in early 2025, and the approval hearing of the settlement in the Merricks v Mastercard class action. The multi-billion claim has reportedly settled for £200 million and the funders, Innsworth, have publicly criticised the settlement and are expected to challenge it at the approval hearing in early 2025. The CAT's response to the question of whether a funder is entitled to intervene in this way is likely to raise bigger issues which go to the heart of the funding of class actions and the viability of the settlement regime. 

2025 is therefore shaping up to be a make or break year for the funding market. These developments, and their ultimate outcome, will determine whether the UK – and in particular, class actions in the CAT – remains attractive to funders. 

Continued growth for class actions?

The English courts continued to see significant growth in class actions in 2024.

However, various developments, including those affecting the funding market discussed above, will determine the extent to which this growth will continue in 2025.

Last year, the CAT handed down its first final judgment in opt-out collective proceedings in Le Patourel v BT, dismissing the claim. The judgment will be closely studied by competition litigators on both sides, as well as competition economists and litigation funders over the coming months. See our separate briefing on the judgment and its potential implications here. 

Outside the CAT, 2024 started promisingly for the representative action procedure, with the Court of Appeal ruling in Commission Recovery Ltd v Marks & Clerk LLP & Anor that the claims engaged common issues and could proceed to trial on a representative basis. However, the claim settled in late 2024. A further representative action – Prismall v Google and Deepmind – was rejected by the Court of Appeal in December 2024, and another claim – Smyth v British Airways PLC – was struck out by the High Court in September 2024. While the English Courts may still be willing to open up the representative action procedure in principle, we have yet to see this happen in practice.

The sharp rise in securities group litigation in recent years continued in 2024. However, in October, the High Court handed down a pivotal first instance judgment in Allianz Funds Multi-Strategy Trust v Barclays that is likely to have significant ramifications in this space and a dampening effect on the appetite of the litigation funders backing these claims. In short, the Court held that the FSMA 2000 framework (sections 90, 90A and Schedule 10A) under which these claims are brought requires claimant investors to have relied on the statement which they allege was false and caused them loss. The judgment (which will not be appealed because the claim subsequently settled) is likely to make it considerably more difficult for investors – particularly passive investors – to prove their claims.

Costs also remained a focus in 2024. In July, the High Court refused to approve a £343 million costs claim, which had been proposed by the claimants for the initial phase of the diesel emissions group litigation, deeming the amount "absurd" and "staggering". Mr. Justice Constable and Senior Costs Judge Andrew Gordon-Saker reduced the £208 million in future costs by 75%, suggesting that the incurred costs were likely inflated due to "over-lawyering". A particular warning was given to group actions, with the court noting that work delegated from the Lead Solicitors to Non-Lead claimant firms is "the breeding ground for inefficiency and potential unjustifiable duplication". We expect this scrutiny to continue in 2025.

For a more detailed discussion of these developments, please see our separate class actions year in review here.

The use of AI in Dispute Resolution: top tips for 2025 

AI was a hot topic in 2024 and will remain so in 2025. Last year, we hosted a webinar on AI and introduced six key propositions that remain highly relevant as we move into 2025. These propositions provide a framework for thinking about, procuring, deploying, and engaging with AI-enabled software, particularly in the context of dispute resolution. 

Proposition 1: Define Your Goal

When considering the use of AI, it is crucial to clearly define your goal. For instance, social media platforms aim to capture and retain user attention. Over the past decade, these platforms have excelled at this, but not without significant societal costs. The algorithms often prioritise content that provokes strong emotional reactions or reinforces existing opinions and biases in order to keep users engaged. 

In the legal and regulatory environment, the goal should be to deliver just outcomes. AI has the potential to make a tremendous difference in achieving this. However, if the goal shifts to something like "cost efficiency," the results may not be as beneficial. Therefore, it is essential to align the use of AI with the overarching objective of delivering fair and just outcomes.

Proposition 2: Consider the Consequences

Deploying AI to achieve your goal requires careful consideration of the potential consequences. It is advisable to seek a broad range of views to ensure a balanced approach. Engage with lawyers, accountants, consultants, colleagues, and professionals both within and outside your field. This diversity of thought will help you make a well-informed decision.

Proposition 3: Accept that unintended consequences will occur

It is inevitable that not all consequences of using AI can be anticipated. Unintended outcomes will arise, which underscores the importance of the following two prudential propositions.

Proposition 4: Understand AI Capabilities and ensure transparency

Ensure that you are adequately trained to understand what the AI can, and cannot, do. This knowledge is crucial for effectively leveraging AI. Make sure those supplying the AI tool can explain what the AI is doing, and has done. You should also be able to articulate this clearly: imagining yourself explaining it to a Judge. Transparency is key to building trust and ensuring the ethical use of AI.

Proposition 5: Establish Robust Governance

Implement a governance structure that is robust and clear. This structure should demonstrate to customers, regulators, third parties, and adversaries that you can be trusted to operate AI within lawful and ethical boundaries. A strong governance framework is essential for maintaining credibility and trust in the use of AI.

Proposition 6: Procure with prudence

The rush to market AI tools is rapid and intense. Huge investments by providers are being made with the aim of securing market primacy. There are no clear market leaders at present, yet consolidation is rapid. The costs of procuring the technology remain high. Beware of your costs exceeding the benefits.

Lawyers in the spotlight 

In 2024, the scrutiny that both private practice and in-house lawyers came under during the Post Office Inquiry, and the SRA's first SLAPP prosecution (which, although unsuccessful on the SLAPP allegation, still resulted in a hefty fine), placed solicitor ethics under the spotlight. We expect this to continue in 2025. 

For some years now solicitor conduct has been governed by a set of seven principles. Solicitors must act:

1. In a way that upholds the constitutional principle of the rule of law and the proper administration of justice.
2. In a way that upholds public trust and confidence in the solicitors' profession and in legal services provided by authorised persons.
3. With independence.
4. With honesty.
5. With integrity.
6. In a way that encourages equality, diversity and inclusion.
7. In the best interests of each client.

The Seven Principles apply to all solicitors whether they are in private practice or in-house. The number of solicitors employed by businesses as in-house counsel has grown significantly to over 34,000, out of a total population of around 170,000; a ratio of one in five.

The extent of the responsibilities of the typical in-house solicitor has, in our view, grown significantly. That role can include adviser to the board, or boards (in a group context), transaction counsel, disputes counsel, regulatory counsel, MLRO, keeper of the corporate history, chief investigator, and all round do-er and adviser. 

The in-house solicitor plays an increasingly pivotal role as the go-between board and business, business and stakeholders, different corporate entities within the client group, and between business and third party advisors such as solicitors and auditors.

No one can serve two masters. Yet the modern in-house solicitor is required to adopt numerous roles sometimes concurrently. The role is pregnant with potential for confusion and conflict. Finding the dividing line between, for instance, putting the interests of the client first, and adherence to the Seven Principles can be hard. Having clarity and confidence to deliver independent counsel can be harder still.

It is perhaps against that background that the Solicitors Regulation Authority recently issued guidance for in-house solicitors. The guidance covers six topics:

1. Identifying your client when working in house.
2. Reporting concerns about wrongdoing when working in house.
3. Internal investigations.
4. Guidance for employers on a solicitor's professional obligations.
5. A new separate document for governing boards, chief executives and senior officers in organisations employing in-house solicitors.
6. New guidance on legal professional privilege when working in house.

It is essential reading both for in-house counsel and those solicitors working in private practice. Critically, it reminds the reader of the importance of the independence of the in-house solicitor and the primacy of the Seven Principles. 

Dilemmas and issues are bound to emerge. We predict increased and sustained scrutiny of solicitors' conduct in 2025, and beyond. We further predict a greater role for private practice in providing in-house colleagues with ethical guidance and/or advice to boards.

Increased use of the anti-suit injunction set to continue

Anti-suit injunctions (ASIs) can be an effective tool when a contracting party breaches an agreement to arbitrate/only commence proceedings in the English courts by commencing proceedings in a foreign jurisdiction. In other words, they are a means of holding a contracting party to its dispute resolution agreement.

Their use has increased post-Brexit (as the EU regime prohibiting them no longer applies) and as a result of the sanctions imposed on Russia after its invasion of Ukraine (as many Russian counterparties attempt to have their disputes dealt with by the Russian courts rather than the contractually agreed forum where sanctions will bite). In 2024, the English courts demonstrated an increased willingness to flex its judicial muscles in using this litigation tool.

Most notably, in UniCredit Bank GmbH v RusChemAlliance LLC, the Supreme Court confirmed the English courts' willingness to uphold arbitration agreements and prohibit foreign proceedings brought in direct contravention of them. More importantly, the Court confirmed that ASIs are available for foreign-seated arbitrations (here the arbitration was seated in Paris) where the arbitration agreement is governed by English law. Read our briefing for more detail.

The English courts also showed a willingness to grant an ASI in support of asymmetric clauses (typical in finance agreements with the obligor agreeing to the exclusive jurisdiction of the English courts but the finance party having the flexibility to bring proceedings elsewhere). In Barclays Bank PLC v PJSC Sovcombank & Anor, Barclays secured both an ASI restraining the Russian bank from pursuing proceedings in Russia and an anti-enforcement injunction (AEI) to prevent enforcement of any Russian judgment should the ASI prove ineffective. 

Equally, the English courts were willing to grant an ASI and AEI in support of an asymmetric clause that obliged the Russian bank to bring proceedings in London-seated LCIA arbitration but allowed the UK bank to choose between arbitration and the English courts (Barclays Bank Plc v VEB.RF).

The courts also showed that they were prepared to go one step further and grant mandatory ASIs requiring defendants to withdraw foreign proceedings where there is strong and clear evidence of breach and the prohibitory ASIs in place proved insufficient. This tool was used where Russian proceedings had been commenced in breach of a London-seated arbitration clause in Renaissance Securities (Cyprus) Ltd v ILLC Chlodwig Enterprises. That said, in a separate hearing the Court confirmed the high bar that applied where an ASI is being sought for third party claims under an arbitration agreement. 

The availability of ASIs and AEIs and the English courts' willingness to use these tools to hold parties to their contractual bargains further enhances the attractiveness of England as a forum for cross-border disputes. We expect to see their continued use in 2025.

Enforcement to become easier

2024 saw an uptick in queries concerning the effectiveness of enforcement procedures in the UK, as clients continued to navigate the complexities of cross-border enforcement in a post-Brexit world. 2025 is poised to make headway in simplifying the procedure for the enforcement of English judgments within the EU and (in time) further afield.  

On 27 June 2024, the UK government ratified the Hague Convention 2019. Formally known as the Convention on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters, it is set to come into force on 1 July this year with the aim of establishing a uniform framework for the recognition and enforcement of foreign judgments in civil or commercial matters between contracting states. In addition, to the UK, all EU countries (save for Denmark), Ukraine and Uruguay have ratified the Convention to date, with more countries anticipated to follow suit as the Convention gains traction.   

The Hague Convention 2019 promises a simplified and more predictable enforcement process for parties with cross-border interests. For example, the current enforcement procedure under the Hague 2005 Convention applies only to matters governed by an exclusive English jurisdiction clause, failing which parties must be guided by bilateral treaties or the national rules of the relevant state on enforcement (as appropriate). Significantly, the Hague Convention 2019 will also apply to judgments given pursuant to non-exclusive or asymmetric jurisdiction clauses in favour of the English courts.  

While this all signals a positive development for the reinforcement of the UK's position as a major hub for cross-border litigation in 2025, parties will undoubtedly require clear guidance and support in navigating these key changes as the impact of the Hague Convention 2019 unfolds throughout the year and beyond.  

Greater public access to court documents?

In Spring of 2024, the CPRC threw the cat amongst the pigeons when they consulted on a proposed revision of CPR 5.4C which, if approved, would have resulted in non-parties having access to witness statements, expert reports and skeleton arguments, without the need for court permission.

Unsurprisingly, this resulted in many responses to the consultation, mostly critical, particularly from law firms and industry bodies such as the London Solicitors Litigation Association. As a result, the CPRC have put a hold on the amendments until further consideration can be given to the concerns raised.  There is currently no indication of when and if any future amendments will be made.

For more detail read A View from the Exchange: has the pursuit of open justice gone too far? and our Quickguide Public access to court documents and hearing in the English civil courts.

Authors: James Levy, Tom Cummins, Tim West, Max Strasberg, Paul Ryan-Brown, Brihadeesh Murali, Jamie O'Neill, Catrin Southgate, Harriet Martin, Lianne Sneddon, Louise Fisher