Jurisdiction(s):
United Kingdom

CJC urges swift legislation overturning PACCAR for LFAs and a formal, light-touch regulatory framework for litigation funding in England and Wales

Published on: 05 June 2025

Published by a Law360 reporter

Legal News

Article summary

The Civil Justice Council, in its final report on litigation funding, pressed the government to enact measures confirming that litigation funding agreements (LFAs) are not captured by the Supreme Court’s 2023 PACCAR judgment. That ruling found that LFAs amount to damages-based agreements and therefore cannot be used in opt-out class action proceedings. The CJC urged ministers to go further than the intended measures in the Litigation Funding Agreements (Enforceability) Bill—scrapped in 2024 ahead of a general election—by ensuring LFAs are not classed as claims management services and are not required to comply with damages-based agreement (DBA) regulations. The report said legislation should be introduced “as soon as possible”. For the avoidance of doubt, it added that any statute should make clear that common law LFAs encompass arrangements where the funder’s return is calculated by reference to the funded party’s damages or settlement, or by a multiplier...

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