Litigation Funding Agreements (enforceability) Bill would reverse SC judgment in PACCAR

The government today moved to end the chaos caused by the Supreme Court’s ruling in PACCAR  by introducing a bill into the House of Lords.

In a brief statement, Conservative peer Lord Evans of Rainow introduced a measure to make provision about the enforceability of litigation funding agreements and for connected services. The Litigation Funding Agreements (enforceability) Bill has been published here. 

Leading costs and funding silk Nicolas Bacon KC of 4 New Square welcomed the fact that a bill has been introduced and said he hoped this would be ‘the beginning of the end’ for the fallout from the PACCAR ruling.

The litigation funding industry was thrown into disarray last July when the Supreme Court ruled in R (on the application of PACCAR Inc) v Competition Appeal Tribunal [2023] UKSC 28 that litigation funding agreements amounted to damages-based agreements, rendering many such agreements unenforceable.

On 4 March lord chancellor Alex Chalk announced his intention to bring forward legislation to reverse the controversial ruling. Chalk said the new legislation would make it ‘easier for members of the public to secure funding for their legal fights against powerful corporations – such as those caught up in the Horizon scandal’.

It is understood that the bill will not follow any expedited process and will progress to the next stage when parliamentary time allows.

Susan Dunn, chair of the Association of Litigation Funders, said the ALF was ‘delighted’ that the government had been ‘true to its word’ in introducing the Bill to remedy the problems caused by PACCAR.

She added: ‘We look forward to the Bill making its way through parliamentary process and being in place by the Summer recess and we will work with the government to ensure the wording of the Bill achieves the desired result of removing all remaining uncertainty about the use of funding for good claims.’

Gary Barnett, executive director of the International Legal Finance Association, said:

‘We’re very appreciative to see the Justice Secretary leading on this issue… This bill is a great starting point, and we hope a full reversal of PACCAR passes through Parliament at pace so citizens and businesses in the UK can continue to have access to this vital industry.’

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