Commons Sense

House of Commons · Written Ministerial Statement

Third-Party Litigation Funding

17 December 2025 · Ministry of Justice

Proposed by Sarah Sackman Lab Finchley and Golders Green

Justice & Courts

Summarised by AI from the official record, so it can contain mistakes.

View on Parliament.uk

At a glance

Key points

  • The government will legislate to clarify that third-party litigation funding agreements are not Damages Based Agreements.
  • Proposed regulations aim to improve transparency and fairness for claimants involved in LFAs.
  • Legislative changes will be introduced when parliamentary time permits.

Issue summary

The statement addresses the impact of the 2023 Supreme Court judgment in PACCAR on third-party litigation funding agreements (LFAs) and proposes regulatory actions to mitigate uncertainty.

Action requested

The government intends to legislate to clarify that LFAs are not Damages Based Agreements, and will introduce proportionate regulation of LFAs to improve transparency and fairness for claimants. These changes will be implemented when parliamentary time allows.

Key facts

  • The Supreme Court judgment in PACCAR introduced uncertainty about the validity of LFAs.
  • Sir Alan Bates has highlighted how third-party funding enabled him to bring a claim against the Post Office.
  • Civil Justice Council (CJC) published a review on litigation funding earlier this year.
  • Two primary recommendations from the CJC will be accepted: legislative clarification and proportionate regulation.
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