The Civil Justice Council is carrying out a review of litigation funding, with a focus on access to justice, the effectiveness of litigation funding and regulatory options. The CJC is due to provide a full report on its recommendations in Summer 2025, after taking into account feedback from a consultation process which closes on 3 March 2025.
Litigation funding is already part of the fabric, and should generally be supported. This is particularly critical following the Supreme Court decision in PACCAR, and the upcoming review by the Court of Appeal of the implications in a number of appeals from the Competition Appeal Tribunal as to whether the use by funders of returns based on multiples of investment is legitimate.
Some claimants have clearly benefited from the ability to access litigation funding, with examples of significant funded cases resulting in all stakeholders sharing in a successful outcome.But equally, there have been examples of funded cases where the economics have not worked out well, with a low settlement number meaning that the stakeholders take a haircut, and the claimant may receive nothing.
Those firms with experience of defending funded cases do raise concerns about the impact of funding.For example, there is a perception that funding can lead to claims being put forward with a view to driving a defendant to settle to avoid irrecoverable costs, even if the merits are not strong. In such cases, even though a settlement number may be far below the actual claimed damages, this may still yield a significant return for the funder. In other cases, the involvement of a funder may lead to a block on settlement, so that once costs pass a certain level, the minimum value of any settlement would need to cover at least the funder's return in order to leave anything for the claimants.