Bates Wells’ strategic litigation roundtable – considerations and managing risk

Strategic litigation has the potential to bring about lasting change and develop the legislative landscape.

On 27 September 2023 we brought together a group of third sector leaders to explore the role that strategic litigation has in furthering the mission of charities, NGOs and others, and to talk about what barriers there are to taking legal action. It’s an area we know our clients are keen to discuss – not just with us, but with each other too.

Charities and NGOs are increasingly turning to litigation as an additional tool to pursue their objects, raise awareness and increase their impact on society. The activities available to charities are wide ranging. At the end of last year, the Charity Commission confirmed by way of updated guidance that campaigning and political activity can be legitimate and valuable activities for charities to undertake, provided such activity furthers their charitable purposes. Similarly, Charity Commission guidance confirms that charities are free to bring litigation against a public body where there is a particular legal issue which requires determination or if it will further the charity’s purposes for the issue to be determined by the court. In addition, charities can and do bring claims against private companies, but in doing so they must ensure that it furthers their purposes.

Key considerations

Before taking any action, organisations need to be clear about what they are trying to achieve. Poorly thought-out causes of action or legal arguments could result in reputational or financial damage. Potential claimants also need to think about whether they should take the case to court if there are other ways for the decision to be re-considered (such as internal complaints and appeals or engaging in dialogue).

If the challenge and timing are right, a key benefit of strategic litigation is that it can create high profile awareness of the issue being challenged, because of the public nature of legal action. Though, just bringing a claim will not necessarily do this on its own, so potential claimants will need to think about how best to generate publicity which will support the campaign aims. Where a claim generates widespread awareness of an issue, it can result in public outcry or shareholder concern leading to corporate behavioural change, with wide-ranging impacts beyond the immediate court decision.

Any precedent change requires legal action, but organisations need to think about whether taking action will harm or further the wider cause: an adverse court decision could, in the worst case, hinder a campaign for years to come. Strategic litigation can help bring organisations to the negotiating table when other efforts have failed, and they can also bring on board collaborators and others with shared objectives. Test cases with thoughtful and meaningful impact and objectives are more likely to garner support. Claimants are more likely to have an impact if they take account of the current appetite for challenge and change from government and the judiciary in framing their case.

Just the serious threat of litigation is likely to make most company directors and public bodies take stock. A well drafted letter before action will not be easily dismissed by inhouse counsel. Pre-action letters can also be helpful in applying pressure and potentially effecting positive change. We have seen cases where good pre-action letters have caused public bodies to reconsider decisions, especially when coupled with clear public opinion in favour of the issue (often achieved through effective campaigns). And the duty of candour required (in judicial review proceedings) can mean the release of relevant information and data which can be used to inform future action or campaigns. On the flip side, overly litigious organisations and poorly thought-out action can be reputationally damaging and could negatively affect long-term relationships and networks. In the public law context, hard edged points of law are also more likely to succeed than challenges to discretionary decisions. But you also need to consider whether the object is to win. Often, raising the issue with the support of a wider campaign can lead to change through other means.

If you think you are likely to want to pursue strategic litigation it makes sense to be proactive either by developing a strategy to lay the groundwork for a potential challenge, by following what others interested in similar issues are doing, or by following developments and being ready to act quickly. The timeframes for taking action can be tight, so it helps to have clear internal governance procedures in place to allow for timely reactive responses both to policy and legislation (or action taken by others). It is important to be aware of litigation time limits. Judicial review claims generally must be brought “promptly” and in any event within 3 months, but timescales can be even tighter than that in some cases, so it makes sense to have a clear sense of the legal team that you want to work with, a good understanding of what needs to be put in place to have a good opportunity of success, clear internal governance to speed up response times, and to have a developed campaign and network ready to support the claim.

Managing risk

The main risks in pursuing strategic litigation are reputational and financial. In trying to test an issue, organisations can consider a range of funding options including crowdfunding or, depending on the case, support from litigation funders. Potential litigants can also seek to obtain some certainty about the potential cost of the litigation by asking the court to impose costs protection, limiting how much they will pay towards the defendant’s legal costs if unsuccessful. They should think about whether they need to bring the case themselves or whether others are better placed to do so. There may be value in supporting claims taken by others where the outcome matches your objectives by providing evidence, giving witness statements, contributing to costs, or supporting and amplifying campaigns through your own PR machine, rather than litigating the issue yourself.

All organisations considering bringing strategic litigation ought to carry out a risk assessment including the following:

• Does the case involve a particular legal issue which requires determination?
• Will the litigation further the charity or organisation’s purposes?
• Are you aware of other groups who are contemplating action on similar issues and are their aims aligned with yours?
• Has the organisation taken legal advice and satisfied itself that the claim has at least a reasonable prospect of success?
• Have the trustees or directors weighed the prospects of success against the consequences of failure – this is not just financial in terms of legal costs and management time, but also the potential positive or negative impact upon the organisation or charity and its charitable purposes?
• Are the primary aims to win the litigation, or to use it to raise awareness of an issue or situation – perhaps even to embarrass a public body or corporation into changing the law or its policy (noting that charities should be aware of the rules regarding political activity if this is the aim)?

Any organisation seeking to pursue strategic litigation should ask itself the following:

• How likely is it that the litigation will persuade the corporation or public authority to change its policy or actions?
• How likely is it that the case will end (or be widely reported) in a way that reinforces the current policy of the public authority or actions of the corporation?
• What is the risk to the charity or organisation’s reputation if the litigation backfires?
• What is the risk that the organisation will be criticised or penalised in costs by the court for bringing proceedings that are hopeless?
• Are the costs and risks of litigation justified by the prospects of achieving the aim of the litigation?
• Are there other ways of achieving the same result without incurring those costs or running those risks?

Contact us

Bates Wells is actively working with our clients to address critical issues through litigation and policy action. We want to support organisations to pursue strategic litigation that could have widespread positive impact. If you have a potential matter you’d like to discuss or would like to learn more about how we can help you, please get in touch.