The government reaction to the Supreme Court decision in PACCAR continues to unfold (note our previous articles here and here). In addition to the legislative repeal of the decision which is currently being pursued through the Litigation Funding Agreements (enforceability) Bill, the Civil Justice Council (CJC) is now undertaking a review of litigation funding, with its interim report expected in the summer and a full report by Summer 2025.

Lord Justice Jackson in his 2009 Review of Civil Litigation Costs: Final Report supported the approach of the CJC at that time of trying to establish a voluntary code for third party funding. His view was that provided one was established, full statutory regulation was not required at that stage but might become necessary if the use of third party funding expands.

The terms of reference seek recommendations from the CJC as to whether regulation is required; and amongst other things whether funders' returns should be capped. This is likely to be a wide ranging review including:

 As to whether funding encourages specific litigation behaviour such as collective action.

It is certainly the case that litigation funding has come a long way in the last 15 years since Jackson LJ's report and the PACCAR decision has highlighted a need to reconsider the litigation funding market. The question of whether statutory regulation should be implemented is a key issue for the CJC. Another area crying out for attention is the Damages Based Agreements (DBA) Regulations which have been the subject of criticism since their introduction. Hopefully this review might also provide an opportunity for promoting reform of the DBA Regulations.