The Lawyer quotes Joseph Evans on the UK government’s plans to introduce legislation to reverse PACCAR
min readThe Government has announced it will reverse the Supreme Court’s 2023 decision on litigation funding in PACCAR.
The judgment, which formed part of the ongoing Trucks litigation, ruled that certain types of litigation funding agreements (LFAs) constituted a form of damages-based agreement (DBA) and so were legally unenforceable.
It restricted the types of litigation funding agreements that parties could enter into and forced many pre-existing agreements to be re-drafted to ensure they were compliant.
Joseph Evans, Dispute Resolution Partner, comments for The Lawyer that funders will welcome this news with has been inevitable for some time:
The Government statement boasts that the proposed legislation will be a victory for access to justice for claimants suing rich and powerful organisations in the UK. However, we must also remember that commercial litigation funding attracts huge returns, meaning the funders will often receive the lion’s share of recoveries in a case, and it is the funders who perhaps stand to profit most of all.
"Although PACCAR threatened to derail the funding industry for a while, most of the uncertainty surrounding it disappeared earlier this year following unsuccessful challenges to funding arrangements brought before the Competition Appeals Tribunal by Sony, Apple, Visa and Mastercard.
"The Tribunal ruled that it would be “absurd” for the funding arrangements in that case, under which the funder’s return was calculated on a multiple of the investment it had made, to be considered a DBA. There does remain some uncertainty where the funder’s return is calculated on a percentage of the damages in the case, which is something the legislation will clear up.
Read the full piece in The Lawyer here.
