The government has moved fast following its announcement on 4 March 2024 that it would move to overturn the effects of the Supreme Court’s decision in PACCAR Inc & Ors, R (on the application of) v Competition Appeal Tribunal & Ors [2023] UKSC 28, with the introduction of the Litigation Funding Agreements (enforceability) Bill into the House of Lords where it is now on its second reading. 

In a model of legislative brevity, the bill overturns the effect of PACCAR in one clause by amending section 58AA of the Courts and Legal Services Act 1990 by providing that:

• An agreement is not a damages based agreement if or to the extent it is a litigation funding agreement; and 
• Defines litigation funding agreement to include the funding in whole or in part of advocacy or litigation services or adverse costs cover under an agreement with the litigant where the litigant becomes liable to pay the funder in the circumstances set out in the agreement.  

Importantly, the bill also provides “The amendments made by this section are treated as always having had effect”. 

This bill neatly and succinctly undoes the impact of PACCAR and, unusually for an act of parliament, but importantly for the litigation funding industry, is of retrospective affect

Hopefully the bill will pass unamended into law soon. When it is does, the legislation will bring clarity to the litigation funding world and restore it to the pre-PACCAR position.