Civil Justice Council Review of Litigation Funding

Luke Akehurst Excerpts

Wednesday 29th October 2025 Westminster Hall

[Sir Julian Smith (Skipton and Ripon) (Con) [R]]

I beg to move,

That this House has considered the Civil Justice Council’s review of litigation funding.

It is a pleasure to serve under your chairmanship, Ms Harris. I refer the House to my entry in the Register of Members’ Financial Interests—until the summer, I was voluntary chair of the Centre for Effective Dispute Resolution. I pay tribute to Mr Justice Simon Picken and Dr John Sorabji, who co-chaired the review, along with each member of the working party and the Civil Justice Council secretariat.

Third-party litigation funding plays an important role, enabling citizens in the UK and businesses to bring claims against larger and often better-resourced firms and organisations. Litigation funding involves an investment company that is not involved in a particular legal case providing all or a portion of the legal costs of a claim, in return for any damages awarded. The typical area in which litigation funding operates is in high-value commercial, arbitration or group litigation claims, particularly in the Competition Appeal Tribunal—a key route for competition-based group claimants to attempt to seek redress and, alongside the Competition and Markets Authority, one of two pillars of the UK’s globally recognised competition regime.

Litigation funding provided financial resource for cases to be taken in the initial stages of the Post Office Horizon scandal, Bates v. Post Office, as well as providing resources in cases taken up against car manufacturers, such as one over false diesel emissions, cases focused on data breaches, those involving car financing and, most recently, a high-profile case last week involving Apple and charges for app use on the App Store.

[Luke Akehurst (North Durham) (Lab)]

I thank the right hon. Gentleman for giving way at such an early stage in his speech. I want to highlight another positive example of the use of litigation funding. It was essential in helping 52 former franchisees of Vodafone—essentially, small business owners, including one in Chester-le-Street in my constituency—to bring a claim against the company, which they would have struggled to bring without funding. Does the right hon. Gentleman agree that this example demonstrates that litigation funding can play a crucial role in enabling access to justice for those who would otherwise be denied it?

[Sir Julian Smith]

I agree with the hon. Member; the Vodafone case, which involved franchisees across the UK, is another example of how litigation funding can help.

The Supreme Court’s judgment in the PACCAR case in July 2023, which involved a claim against truck manufacturers for anti-competitive behaviour, rendered many third-party funding agreements unenforceable by bringing them in scope of another type of legal funding agreement, damage-based agreements. The impact of the judgment on the litigation funding market has been two years of instability and a lack of clarity about its contractual operating terms. The last Government sought to remedy the issue by introducing the Litigation Funding Agreements (Enforceability) Bill, which had reached Second Reading in the House of Lords immediately prior to the election.