Author

Sneha Nainwal

Published
30th June 2025

Contents

Summarise Blog

The Civil Justice Council’s 2025 Final Report, published in June 2025, offers a way forward after a landmark Supreme Court decision disrupted third-party funding. We highlight what’s changing, and why it matters.

Why PACCAR turned litigation funding on its head

In July 2023, the UK Supreme Court sent shockwaves through the legal and funding industries with its decision in PACCAR Inc v Competition Appeal Tribunal [2023] UKSC 28.

The court held that litigation funding agreements (LFAs), where funders receive a percentage of damages recovered, count as damages-based agreements (DBAs) under the Courts and Legal Services Act 1990.

Although this sounds technical, the impact was massive and brutal:

  • Most LFAs became unenforceable, as they hadn’t been drafted to meet the strict rules governing DBAs.
  • Funders had to freeze or repaper deals, leaving claimants – and even big corporates – scrambling for cash to keep cases alive.
  • Access to justice took a hit, as without third party money, plenty of good claims suddenly looked too expensive to run.

In one judgment, a well-established funding model was thrown into legal uncertainty, with serious consequences for individuals, businesses, and funders alike. In short, PACCAR turned a well oiled funding market into a legal quagmire.

Has the Civil Justice Council provided a lifeline?

The Civil Justice Council (CJC) has now stepped in with its Final Report on the Review of Litigation Funding. Commissioned in the wake of PACCAR, the report recommends concrete legislative changes to stabilise the market and safeguard access to justice.

Here are the key takeaways of the report:

Reverse the effect of PACCAR

The CJC’s headline recommendation is clear – legislatively overturn the PACCAR ruling. This would restore the pre-2023 position where LFAs aren’t treated as DBAs unless explicitly structured that way. – making thousands of agreements enforceable again.

‘Light-touch’ regulation

Rather than heavy-handed oversight, the CJC proposes a light-touch regulatory regime for litigation funding. The goal is to maintain transparency and fairness without making funding too complex or unattractive for investors.

Reform CFAs and DBAs

The report also calls for practical reforms to conditional fee agreements (CFAs) and damages-based agreements (DBAs) to make them simpler and more commercially viable.

Preserve access to Justice

At its core, the report emphasises the importance of funding as a tool for justice. Whether it’s individuals, SMEs, or even large corporates facing high legal costs, the ability to finance claims or defences should not hinge on technical drafting risks.

Why does this matter to UK and international businesses?

For UK-based businesses, this is about certainty. Funding is no longer niche – it’s a core part of legal strategy. Without reform, businesses may be forced to seat disputes outside England and Wales simply to access funding under more predictable regimes.

For international parties, the concern is reputational. England and Wales have long been attractive for commercial litigation because of their legal infrastructure, including a mature funding market. If the current uncertainty continues, global litigants may look elsewhere.

What does the future look like?

The CJC’s Final Report offers a credible, measured response to the damage done by PACCAR. It’s not just about fixing a technical issue, it’s about ensuring that litigation remains accessible, fair, and commercially realistic.

All eyes are now on the UK government to act.

Whether you’re a funder, a claimant, a law firm, or an international business watching where to seat your next dispute, this is one to follow closely.

Our latest litigation & dispute resolution content

What is a section 25 notice?

Landlord & Tenant Advice
read more >
Business Interruption Insurance | Our fixed fee support
Litigation & Dispute Resolution
read more >
Building Safety Act 2022: Tips for developers and freeholders
Property Disputes
read more >
Seven steps to handling a client insolvency
Corporate Restructuring & Insolvency
read more >

See more guides >

Our legal experts are here to answer any question you might have

If you’d like to speak to a member of our team, please fill out the form and we’ll be in touch within two hours.
If you know who you need to contact, you will find a full list of our people with email and telephone numbers here.
Call Us: 0330 024 0333

About the Author

Sneha Nainwal

Partner & Head of India Desk

Sneha’s practice has a strong focus on cross-border commercial disputes and financial services litigation. Sneha has wide experience in acting for clients, both businesses and private individuals, in complex litigation before Indian and English Courts, as well as international arbitration and mediation. Sneha's clients include sovereign states, state owned entities, multinational companies, financial services providers and global entrepreneurs based in the UK, India and abroad. Sneha has strong personal and professional roots in India, and together with her vast network of global contacts, is ideally placed to provide strategic solutions to international clients. “Sneha is sharp and commercial. She is…