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Home | News & Case Studies | Business and Commercial Disputes in the UK: Key Litigation Trends for 2025
The Shareholder Rule Under Challenge: Implications for 2025
In 2024, the English courts significantly altered the legal landscape concerning privilege, challenging the long-standing Shareholder Rule. This principle, which historically granted shareholders access to company documents, now faces a pivotal test in 2025.
A crucial ruling in Aabar Holdings SARL v Glencore Plc & Others [2024] examined the extent to which a company can assert privilege against its own shareholders. The decision carries significant implications for both businesses and investors.
Since the 19th century, the Shareholder Rule has prevented companies from claiming privilege against their own shareholders, allowing access to otherwise confidential documents. However, in Aabar, the High Court overturned this precedent, ruling that companies can assert legal privilege against shareholders—except for documents created primarily for litigation between the company and the shareholder.
Mr Justice Picken’s judgment effectively abolished the Shareholder Rule, reshaping the balance of power between companies and shareholders. As a result, unless a document is prepared specifically for litigation involving the shareholder, privileged legal advice can now be withheld. This aligns with modern company law principles, particularly Salomon v Salomon, which established that a company is a distinct legal entity separate from its shareholders.
Impact on Shareholder Litigation
This decision will have a significant impact on shareholder litigation in 2025, particularly cases under sections 90 and 90A of the Financial Services and Markets Act 2000 (FSMA). Shareholders will face greater challenges in accessing internal legal advice when pursuing claims against companies. Furthermore, the ruling clarifies that joint interest privilege—often cited in shareholder disputes—is not a standalone legal principle but rather a term describing specific privilege scenarios.
While an appeal remains possible, if the decision stands, it will reshape corporate litigation strategies. Companies will have stronger grounds to protect confidential legal communications, while shareholders will need to explore alternative avenues to obtain evidence.
This ruling marks a critical shift in shareholder disputes and will likely influence litigation trends in 2025 and beyond.
Reform of Litigation Funding
The third-party funding (TPF) industry was disrupted by the Supreme Court’s PACCAR decision in July 2023. The ruling determined that TPF agreements, where funders receive a percentage of awarded damages, qualify as damages-based agreements (DBAs) and are therefore unenforceable in opt-out proceedings before the Competition Appeal Tribunal (CAT). This overturned the previously accepted view that TPF agreements did not constitute DBAs, rendering many existing agreements in the UK unenforceable overnight.
In response, the Civil Justice Council (CJC) launched a review of litigation funding. The Ministry of Justice confirmed that the reintroduction of the Litigation Funding Agreement (Enforceability) Bill will be delayed until the CJC completes its review. An interim report was published in October 2024, with final recommendations expected by summer 2025, potentially paving the way for significant regulatory changes and new disputes.
The newly elected Labour government has stated it will not reintroduce the Bill or legislate on the PACCAR decision until the review concludes. The CJC’s review examines the role of third-party funding, its impact on access to justice, and potential regulatory options. It has also considered international regulatory models and alternative funding structures.
Implications for Litigation
2025 is poised to bring significant changes to litigation funding, with potential new regulations on the horizon. Two key questions remain: Will the PACCAR decision be reversed? And will litigation funding become subject to formal regulation?
If the ruling is overturned, it could bring much-needed clarity to the market. However, striking a balance between access to justice and consumer protection will be critical. Throughout 2025, increased scrutiny from the government, the CAT, and the courts will shape the future of litigation funding, impacting funders, litigants, and the broader legal system.
Regulation of AI
AI remains a focal point for businesses and continues to evolve rapidly, presenting legal challenges that courts and policymakers must address.
A notable case currently before the English courts is the Stability AI litigation. Getty Images and other claimants, pursuing a representative action under CPR 19.8, have accused the open-source AI company of copyright infringement. At the heart of the dispute is whether AI-generated content infringes existing copyrights—an increasingly pressing issue as AI technologies advance. Specifically, Stability AI’s use of images scraped from Getty’s website to train its models has raised serious legal concerns.
Recognising these challenges, the UK government launched a consultation on copyright and AI in December 2024. This reflects broader efforts to develop regulatory frameworks that keep pace with technological advancements. While new legislation may eventually clarify AI-related copyright issues, ongoing litigation will continue to shape the legal landscape in the meantime.
The trial for the Getty claimants’ case is scheduled for June 2025. Given the evolving nature of AI regulation, it remains uncertain how future laws will address the development, use, and liability of AI.
Litigation Implications
As AI technology advances, courts must establish case law on its impact on intellectual property, particularly copyright. Cases like Stability AI are setting crucial precedents that will influence future disputes. The courts must balance protecting creators’ rights with fostering technological innovation.
Until clear legislation is in place, litigation will continue to define the rights and responsibilities of those involved in AI-related disputes. These cases will play a crucial role in shaping legal interpretations of AI’s role in copyright law and guiding future regulatory policies.
Other Key Litigation Trends to Watch
- Class Actions – Following significant decisions in 2024, class actions remain a rapidly evolving area of law in England and Wales. The number and value of class actions before both the Competition Appeal Tribunal and the High Court are expected to rise in 2025 and beyond.
- Arbitration Bill – The Arbitration Bill, which failed to pass before the General Election, has been reintroduced by the Labour Government in similar terms and is currently under consideration in the House of Commons. The proposed amendments will have notable effects on litigation, particularly where arbitration intersects with court proceedings.
- “Secret” Commissions – There has been a surge in County Court cases concerning “secret” commissions—payments made in secret by one party to another for business introductions. Three cases, Johnson v FirstRand Bank, Wrench v FirstRand Bank, and Hopcraft v Close Brothers, are set to be heard together by the Supreme Court from April 1-3, 2025. The ruling is expected to clarify the duties owed by brokers and the level of disclosure required to negate the secrecy of commissions.
The legal landscape for business and commercial disputes in the UK is undergoing significant transformation in 2025. Key rulings on shareholder rights, litigation funding, and AI regulation are reshaping the way companies, investors, and funders engage in litigation. As these developments unfold, businesses and legal practitioners must stay vigilant, adapting their strategies to navigate an increasingly complex and evolving legal environment.
Resources
- Aabar Holdings SARL v Glencore Plc [2024] EWHC 3046 (Comm).
- R (on the application of PACCAR and others) v Competition Appeal Tribunal and others [2023] UKSC 28.
- Response by Ministry of Justice to written question (1 August 2024)
- CJC Review of Litigation Funding, Interim Report and Consultation (31 October 2024)
- Section 47C(8) of the Competition Act 1998.
- [2025] EWHC 38 (Ch).
- UK Government Consultation on Copyright and AI.
- Arbitration Bill.
- UK Supreme Court Announcement on “Secret” Commissions.
