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Civil Proceedings: Third Party Financing

Answer

As announced on 17 December 2025, the Government intends to accept the two key recommendations of the Civil Justice Council’s (CJC) review:

We will legislate to mitigate the effects of the PACCAR judgment by clarifying that Litigation Funding Agreements are not Damages-Based Agreements and will introduce proportionate regulation of Litigation Funding Agreements.

We intend to legislate to implement these changes when parliamentary time allows. Once this work has been completed, we will consider the CJC’s remaining recommendations in more detail.

We recognise the importance of maintaining access to justice, whilst avoiding issues stemming from speculative or unmeritorious claims. The new regulations will take a balanced and holistic approach; this involves appropriate consideration of the position of claimants and defendants and the courts, as well as the legal and litigation funding sectors.

The regulations will complement existing safeguards preventing speculative and disproportionate litigation, such as the power, provided in Part 3 of the Civil Procedure Rules, for the court to dismiss any claim which has no reasonable grounds.

The Government is confident that the CJC has appropriately reviewed litigation funding and thus we have not found it necessary to make our own formal assessment of the potential impact of third-party funded collective actions on court capacity, judicial workload, or case duration. We also do not hold data relating to the costs to the public sector of third-party funded collective actions.

Secondary information

Type

Written question

Reference

HL15860

Session

2024-26

Grouped for answer

Yes

Subjects

Civil proceedings Legal costs Third party financing

Contains statistics

Yes

Link

View this Written question on www.parliament.uk