Supreme Court holds that litigation funding agreement is a damages-based agreement. R (Paccar Inc) v Competition Appeal Tribunal [2023] UKSC 28

Litigation funding agreements have become almost indispensable tools in complex and costly civil litigation. This is so, whether the funding agreement enables a single or small set of parties to sue a single or small set of defendants, or the proceedings are collective involving the aggregation of a larger set of claimants seeking redress for loss caused by the defendant’s invasion of their legal rights. The Supreme Court’s decision in R. (Paccar Inc) v Competition Appeal Tribunal that the litigation funding agreement in that case was a damages-based agreement that did not comply with the conditions specified in s.58AA of the Courts and Legal Services Act 1990 and the Damages-Based Agreements Regulations 2013 represents a serious blow to the litigation funding industry. The case note below offers an explanation and critique of this decision, as well as a consideration of its potential implications.