Litigation Funding Agreements – Are They Valid In India?

The UKSC's decision

On July 26, 2023, the United Kingdom's Supreme Court (the “UKSC”), in the matter of R (on the application of PACCAR Inc and others) (Appellants) v. Competition Appeal Tribunal and others (Respondents), [2023] UKSC 28, held that Litigation Funding Agreements (“LFAs”), under which the funder's remuneration is calculated by reference to a share of the damages ultimately recovered, fall within the statutory definition of damages-based agreements (“DBAs”) and are, therefore, unenforceable. In the UK, a DBA is an agreement between a person providing advocacy, litigation or claims management services and the recipient of those services, which provides that: (i) the recipient is to make a payment to the person providing the services if the recipient obtains a specified financial benefit in connection with the matter in relation to which the services are provided, and (ii) the amount of that payment is to be determined by reference to the amount of the