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Third-Party Litigation Funding
17 December 2025
Type
Written Ministerial Statement
Department
Ministry of Justice
At a Glance
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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