As had been expected, the Civil Justice Council (CJC) has finalised its review of litigation funding in England & Wales before the summer break and published its final report on 2 June 2025.

Highlights of the CJC’s recommendations include the following.

• First, that there should be legislative reversal of the PACCAR decision in order to bring clarity to the enforceability of litigation funding agreements.
• Second, that there should be statutory regulation of litigation funding, to be overseen by the Lord Chancellor and Ministry of Justice (MoJ) rather than the Financial Conduct Authority.
• Third that there should be baseline regulation, for all funded claims, addressing matters such as capital adequacy, funders not controlling litigation, conflicts of interest provisions, anti-money laundering checks, and disclosure at the outset of the existence of funding (detailed provisions should reflect the principles set out last year by the European Law Institute).
• Fourth, a clear recognition of the need for additional regulation of funding arrangements in consumer disputes rather than in purely commercial claims. The report refers here to the possible introduction of a “consumer duty”.
• Rejections of a cap on funders' returns and of default security for costs are among further recommendations, which also address developing standard terms for funding agreements, improving professional (legal) services regulation, and introducing new court rules and a Pre-Action Protocol for mass claims.

The CJC recommends that its proposals are implemented via “a single, comprehensive, statute”. Although this approach is described as “light touch”, it is suggested that it may well feel fairly robust in practice if it is taken forward with the full force of statutory backing.

The Council regards reversing PACCAR as a priority, to be implemented as soon as possible. It is worth noting that it recommends that this should be done both prospectively and retrospectively.

The report then envisages “separate” primary legislation for its other proposals. The recommendations are directed to the MoJ and we would expect a formal response in the coming weeks. That should set out what measures the Ministry will implement and, in broad terms, how and when it proposes to do so. 

Should the MoJ accept that the immediate priority is to reverse PACCAR, it could relatively quickly introduce a Bill modelled on the Litigation Funding Agreements (Enforceability) Bill that lapsed due to last year’s general election. However, it is open to question whether the Ministry would secure sufficient parliamentary time for that as well as for a second Bill to cover the wider recommendations. If that were the case, it might need to set out, within a single Bill, a phased approach to implementation with different commencement dates for the different measures.

The final report only touches on the high-profile Merricks v Mastercard litigation and looks to have been written before the recent settlement approval in it. For similar reasons of timing, it cannot directly address the challenge to the enforceability of multiplier-based returns arising from Alex Neill v Sony Interactive Entertainment which is due to be heard on appeal in the next few weeks. 

We will be giving a good deal more detailed consideration to what the issues raised in CJC report, and their implementation, may mean for litigation funding in England & Wales and for the associated ‘class action’ (collective proceedings and representative actions) and group action regimes. On 19 June we will be hosting an in-person meeting at our London office to discuss the implications of the key recommendations made in the review.

What is immediately clear, however, is that the report is a serious and wide-ranging review of the approaches to the future regulation of litigation funding in England & Wales which carries the weight of endorsement by the CJC and by the Master of the Rolls, who said of the report that it:

“… provides a comprehensive and balanced package of reforms that will ensure that third party funding continues to support access to justice [which] will improve the effectiveness and accessibility of the overall litigation funding landscape [and] will form the foundation for a more transparent, fair and effective litigation funding framework in England and Wales.”

In the meantime, however, if you would like to discuss any of the issues raised, do feel free to reach out to your usual contact at Clyde & Co and/or Alistair Kinley, Paul Wainwright, or Ben Knowles.