Question to the Ministry of Justice:

To ask His Majesty's Government, in the context of the Civil Justice Council's review of litigation funding and the Government's plans to regulate litigation funding, (1) what definition of litigation funding agreements they propose to adopt; (2) whether portfolio funding will be regulated by the Financial Conduct Authority as a form of loan in line with the Council's recommendation 28, or under any proposed litigation funding regulations; and (3) what steps they are taking to ensure that both forms of funding are subject to appropriate and distinct regulatory oversight.

The Government welcomes the Civil Justice Council’s (CJC) review and is carefully considering all its recommendations.

As announced on 17 December 2025, the Government’s priority is to accept the CJC’s two primary recommendations and legislate to clarify that Litigation Funding Agreements (LFAs) are not Damages-Based Agreements and introduce light-touch regulation of LFAs. As we determine the appropriate form of regulation, we will consider the most suitable definition of a LFA. We will continue to engage with stakeholders as we develop this policy to ensure that any future framework provides for proportionate and effective regulation.

Once this work has been completed, we will consider the CJC’s remaining recommendations, including those relating to portfolio funding, in more detail. We will provide further information in due course.