Jurisdiction(s):
United Kingdom

Court of Appeal confirms cost‑multiple LFAs (even with damages caps) are not DBAs in CAT opt‑out collective proceedings, providing post‑PACCAR certainty

Published on: 10 July 2025

Published by a Law360 reporter

Legal News

Article summary

On 4 July 2025, the Court of Appeal unanimously dismissed challenges by Apple, Visa, Mastercard and Sony to the validity of commonly used funding arrangements that calculate a funder’s fee or return as a multiple of their outlay or costs in class actions and class action claims, a ruling expected to lift spirits across a funding sector seriously rocked by the Supreme Court’s PACCAR judgment and its effects.

Macfarlanes LLP partner Malcolm Hitching said the outcome is significant because it recognises that collective proceedings are a necessary part of the legal landscape, that consumers do need protection, and that the Competition Appeal Tribunal is there to provide that protection.

He observed that, had the Court of Appeal reached the opposite view, it would have been difficult to see how a funder could actually provide funding to a collective group of claimants.

Sony and others had disputed whether litigation funding agreements, amended in response to a 2023 ruling by the top court, known as PACCAR, could be enforced.

PACCAR cast doubt on the lawfulness of numerous LFAs and triggered urgent renegotiations between funders and class representatives to ensure they had not entered damage-based agreements...

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