The Civil Justice Council has published an Interim Report and Consultation as part of its review of litigation funding.

The review followed the Supreme Court’s decision in R (PACCAR) v Competition Appeal Tribunal [2023] UKSC 28 (“PACCAR”) which cast into doubt the validity of many third-party funding agreements. In response to PACCAR, the previous government introduced the Litigation Funding Agreements (Enforceability) Bill 2024 which sought to overturn the effects of the judgment. However, as we previously commented upon here, the Bill failed to become law before the general election.

The current government has stated that it does not intend to reintroduce the Bill to Parliament. Instead, it will consider the conclusions of the Civil Justice Council (“CJC”), which launched a broad-sweeping review of litigation funding earlier this year.

The CJC has now published its interim report, alongside a consultation. The interim report is a detailed document, setting out the background to, and self-regulation of, third-party funding in England and Wales before considering different approaches to regulation (including those in other jurisdictions) as well as other litigation funding options that might be available to parties.

The consultation is just as comprehensive. It addresses among other things:

• How effective third-party funding is in securing effective access to justice and promoting equality of arms between parties to litigation;
• What risks or harms may be associated with third-party litigation funding;
• Whether the same regulatory mechanisms should apply to all types of litigation and English-seated arbitration;
• Whether third-party funders should be exposed to paying the costs of proceedings they have funded;
• Whether a funder’s return on any third-party funding agreement should be subject to controls, such as a cap (and if so, what that cap should be and who should set it);
• What alternatives exist to third-party funding and whether they should be encouraged;
• What role the court and the Civil Procedure Rules should play in controlling the conduct of litigation supported by third-party funding;
• Where the court should be required to approve settlements in proceedings that are funded by third-party agreements; and
• Whether the availability of third-party funding encourages specific forms of litigation (including unmeritorious or vexatious claims).

The consultation closes on 31 January 2025 and can be read in full here. The Civil Justice Council’s Interim Report can be read here.