The legislation being used to exonerate hundreds of sub-postmasters wrongly convicted over the Horizon IT scandal should include measures to protect the specialist finance sector which helped Alan Bates to overturn Britain’s biggest miscarriage of justice, according to an influential trade body.

Sky News understands that the International Legal Finance Association (ILFA) wants ministers to use the Horizon Bill to reverse a Supreme Court ruling which has cast a pall across the litigation funding sector.

Litigation funding sources argue that the ruling in a case known as PACCAR, which concerned truck manufacturers accused of acting as a cartel, has made litigation funding “almost impossible in the UK, and risks unwinding years of historic judgments against proven corporate wrongdoers who have harmed people and small businesses”.

Gary Barnett, ILFA’s executive director, said: “The UK government has rightly connected the vindication of the sub-postmasters with the funding provided to them by the legal finance industry which underwrote their campaign for justice.

“Alan Bates confirms it would not have been possible without it.

“So it is troubling that at the very moment the government is focusing on the injustice done to the sub-postmasters, inaction on the PACCAR ruling could pull up the drawbridge for future claimants.

“That’s why we welcome the government’s commitment to fixing this issue.

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“The government should consider using any legislation available – including the upcoming Horizon Bill.

“We hope the justice secretary gets the support he needs to ensure that the next Alan Bates has the necessary financial firepower to expose wrongdoing and secure justice.”

Alex Chalk, the justice secretary, has pledged to address the issue “at the earliest legislative opportunity”, he told the Financial Times recently – and ILFA believes that opportunity will present itself in the Horizon Bill.

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Ministers had been keen to reverse the ruling in the Digital Markets Competition and Consumers Bill but were unable to after it was deemed out of scope by parliamentary authorities.

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