The Civil Justice Council (CJC) published its final report on June 6, 2025, recommending urgent legislation to reverse the UK Supreme Court's July 2023 decision, widely known as the 'PACCAR ruling.' This ruling controversially classified many litigation funding agreements (LFAs) as damages-based agreements (DBAs), rendering them unenforceable.
The CJC's recommendation aims to take LFAs entirely outside the regulatory ambit of DBAs, with both prospective and retrospective effect. This move is intended to bring much-needed clarity and stability to the UK's litigation funding market, which has experienced significant uncertainty since the original ruling.
While the 'PACCAR ruling' was a legal precedent named after PACCAR Inc, its reversal would primarily benefit the broader litigation funding industry by restoring enforceability to various agreements. For PACCAR, this development indirectly removes a negative association with its name in a significant legal context.
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