- AI: from warnings to action. 2025 saw warnings from the court about serious sanctions for lawyers who submit documents that have been prepared using artificial intelligence and citing imaginary case law and inaccurate case summaries. Further rules and/or guidance around the use of AI are expected, and this is currently under consideration by the Civil Justice Council (CJC). AI may become more frequently used across all areas of litigation, with an increase in the use of AI in large document review exercises — the usual principles of proportionality and reasonableness will remain key in considering the use of developing technologies in disclosure. Looking ahead, we may see satellite disputes concerning the application of privilege, for example, to AI prompts.
- A new frontier for litigation funding? In R (PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28, the Supreme Court held that litigation funding agreements are damages-based agreements if they provide that, if the claim is successful, the funder is entitled to a percentage of any damages recovered. This meant that many litigation funding agreements were subsequently unenforceable due to a failure to comply with the Damages-Based Agreements Regulations 2013, and there was a concern around access to justice for claimants as a result. It was widely expected that legislation would be introduced to clarify the position, and, in July 2025, the CJC said urgent legislation was needed to reverse the effect of the PACCAR decision. Following an announcement in December, it is clear that the government intends to follow this recommendation, as well as the CJC’s recommendation to introduce proportionate regulation of third-party litigation funding agreements. The exact timing and details of future legislation is unclear, but we may expect the legislation to arrive this year. In any event, these reforms would represent a significant shift in the U.K.’s litigation funding market.
- More procedural reforms. Six years on from the introduction of the disclosure pilot, the court has invited feedback on the operation of PD 57AD (Disclosure in the Business & Property Courts), covering topics such as the impact on the cost and size of document review exercises, the success (or not) of improving cooperation between parties and its appropriateness in light of evolving uses of technology (including AI) in disclosure. This might prove to be an impetus for further refinements to the disclosure process in the year ahead.
A two-year pilot scheme (operating under PD 51ZH) expanding public access to documents in litigation is now underway. The scheme requires certain categories of documents to be filed publicly on the court’s system. This indicates a general trend towards greater transparency, but exactly how this will operate in practice, what other documents may be caught, and what debates there may be around the appropriateness of publication of potentially sensitive content remains to be seen. What is clear, though, is that this year may be formative in terms of the level of access the public has to court documents.
Last year, the Civil Procedure Rule Committee (“CPRC”) also began considering potential changes to modernise service rules, in particular around service by electronic methods. The CPRC has consulted on minor changes to the rules, most notably removing the need for legal representatives to explicitly agree to accept service by electronic means (e.g., email). We may see the impact of these changes soon and parties should be alive to the varying methods of service. - Authorised Push Payment (APP) fraud disputes bubbling to the surface. We may continue to see litigation concerning the scope of liability for APP fraud. The Supreme Court in Philipp v Barclays Bank [2023] UKSC 25 found that banks do not have any liability under the Quincecare duty in the context of APP fraud, as there is no question about the validity of the customers’ instruction. However, other routes to liability are under dispute, and appeals are due to be heard this year on whether a separate duty of retrieval (i.e., duty to recover lost sums) is owed. If there is a shift in the liability landscape, then we might expect a flurry of litigation activity involving victims of APP fraud.
- No conscious awareness. Last year, the Privy Council held that a claimant does not need to show a conscious awareness or understanding of the representation made in order to succeed in a claim based on the tort of deceit. Although not binding on the Courts of England and Wales, it might be a persuasive authority in an area where there have been conflicting decisions over recent years. As a result, claimants may be galvanised to push ahead with claims formulated on the basis of the tort of deceit and we may become aware of an uptick in such actions.
Outlook 2026: UK Civil Fraud & Business Disputes
