Question to the Ministry of Justice:

To ask His Majesty's Government what estimate they have made of the cost of defending and settling increased volumes of funder-backed litigation against public bodies.

The Government has not carried out a formal assessment of the economic impact of the UK Supreme Court’s judgment in PACCAR on businesses, publicly funded bodies, or stability of the litigation funding sector. There is also no official estimate on the cost of defending and settling increased volumes of funder-backed litigation against public bodies. However, the Civil Justice Council carried out a thorough and holistic review of litigation funding which the Government has welcomed and has been used to inform our policy development in this area. The Council’s full report can be found here and its interim report and public consultation can be found here. Alongside the public consultation, the Council established both a core Working Group and Consultation Group to ensure a wide range of perspectives informed the development of its recommendations.

As announced via Written Ministerial Statement on 17 December 2025, we intend to legislate to implement the Council’s recommendations to mitigate the effects of the PACCAR judgment and introduce proportionate regulation of Litigation Funding Agreements (LFAs) when parliamentary time allows. The legislation will restore the availability of LFAs as a source of funding by clarifying that they are not Damages Based Agreements, and ensure there is a regulatory regime that protects those signing up to LFAs.

The new regulatory framework will take a balanced and holistic approach, with appropriate consideration for financial impacts on public bodies, implications for businesses, and wider economic factors. These will complement the existing safeguards preventing speculative and disproportionate litigation, such as the power in Part 3 of the Civil Procedure Rules for the court to dismiss any claim with no reasonable grounds. There are no current plans to introduce further measures beyond those announced on 17 December 2025 until we have considered the Council’s remaining recommendations in more detail.

We recognise the critical role third-party litigation funding can play in access to justice and in the attractiveness of England and Wales as a jurisdiction to resolve disputes, as well as the need to ensure that it works fairly and proportionately for all involved. We will outline next steps in due course.