Recent signals from the UK Government suggest legislative action is planned following the Supreme Court’s PACCAR decision. That ruling introduced uncertainty around how certain funding arrangements are treated under existing law.
The PACCAR Decision and Its Impact
The PACCAR judgment altered the legal interpretation of some funding agreements, particularly those where a funder receives a percentage of damages. By bringing these arrangements within an existing regulatory framework, the decision raised doubts over whether many agreements remained enforceable. This uncertainty disrupted the market.
Government Response and Legislative Direction
In response, the Government has indicated its intention to reverse the practical effects of the PACCAR ruling through new legislation. Earlier attempts to address the issue did not progress before a change in administration. Since then, a review by the Civil Justice Council has shaped the current approach, with ministers signalling support for clearer rules and proportionate oversight, subject to available parliamentary time.
Planned Regulation and Market Implications
Proposed reforms are expected to confirm that funding agreements fall outside damages-based rules, while introducing a more structured regulatory framework. For businesses operating in litigation funding like novo-modo.co.uk/litigation-funding, this signals an effort to restore certainty without restricting legitimate funding models that support complex and high-cost claims.
What This Means Going Forward
If implemented as intended, the changes could help stabilise the market and improve access to justice for claimants who rely on third-party support.
Overall, the Government’s plans point towards greater legal clarity, although the full impact will depend on how and when the reforms are introduced.
