SubscribeIn a previous blog post, we discussed the introduction to Parliament of the Litigation Funding Agreements (Enforceability) Bill (the Bill), which was designed to introduce legislation that would reverse the outcome of the UK Supreme Court’s decision in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others.[1]
As we previously set out, the ruling in PACCAR was set to have significant ramifications for litigation funders, claimants and claimant law firms in the UK that rely on third-party funding, potentially threatening the financial viability of swathes of the litigation funding industry. In PACCAR, the Supreme Court held that litigation funding agreements that entitle funders to be paid a portion of any damages recovered (as opposed to a multiple of the investment made by the litigation funder) are “damages-based agreements”, as defined in the Courts and Legal Services Act, and are therefore unenforceable unless they comply with the relevant regulatory regime.
The Bill proposed amending s58AA of the Courts and Legal Services Act, to insert a provision that “an agreement is not a damages-based agreement if or to the extent that it is a litigation funding agreement”. A litigation funding agreement
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