Litigation Funding Agreement May Be Enforceable In Part Despite PACCAR Decision

In what appears to be the first decision to consider the implications of the Supreme Court's judgment in PACCAR Inc v Road Haulage Association Ltd [2023] UKSC 28 (considered in our previous blog post), the High Court has held that there is a "serious issue to be tried" that the element of a litigation funding agreement which provides for the funder to receive a multiple of funding remains enforceable, even though the aspect which provides for a percentage of damages is unenforceable in light of PACCAR: Therium Litigation Funding A IC v Bugsby Property LLC [2023] EWHC 2627 (Comm).

In PACCAR, the Supreme Court held that litigation funding agreements which provide for the funder to be paid a share of damages are "damages-based agreements" (or DBAs) and therefore must comply with the regulatory requirements applicable to such agreements in order to be enforceable.