Fallout From Supreme Court Decision On Litigation Funding Arrangements

Two recent decisions show the High Court and the Competition Appeal Tribunal (CAT) grappling with some of the unanswered questions and areas for dispute following the Supreme Court decision on litigation funding arrangements in R (PACCAR) v Competition Appeal Tribunal [2023] UKSC 28 ("PACCAR") (considered in our earlier post here.) In PACCAR, the Supreme Court ruled by a majority that litigation funding agreements (LFAs) that remunerate the litigation funder by reference to a proportion of the damages ultimately recovered constitute damages-based agreements (DBAs). The effect of this decision is that many LFAs currently in existence are likely to be unenforceable unless they satisfy additional stringent conditions in subsidiary legislation.