UK Litigation funding: Court deliberation of ‘multiple approach’ back on the timetable

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The Court of Appeal has confirmed that it will finally lift the stay on consideration of a crucial question on the validity of litigation funding agreements, potentially reshaping the landscape for funders and claimers alike.

At a directions hearing on 4 February 2025 Sir Julian Flaux and Lord Justice Green lifted a stay on five appeals from the Competition Appeal Tribunal (CAT). These cases all hinge on whether the so-called ‘multiple approach’ – where funders receive payment based on a multiple of their investment rather than a percentage of their damages – complies with English law following the Supreme Court’s landmark decision in PACCAR. See our previous articles for more information – Supreme Court makes waves in litigation funding and Fracas post-PACCAR.

The PACCAR ruling disrupted the litigation funding industry by determining that agreements entitling funders to a share of damages are Damage-Based Agreements (DBAs) and therefore unenforceable in opt-out CAT cases. In response, funders adopted the multiple approach, arguing it falls outside the scope of a DBA.

However defendants in the stayed CAT cases are challenging this model, arguing that even though funders are paid on a multiplier, their return is still intrinsically linked to damages, meaning the funding arrangement should still be classified as a DBA.

These cases were originally stayed because the previous government had indicated it would introduce legislation to resolve the uncertainty created by PACCAR. Before that could happen, though, a general election was called, and the new government has confirmed that it will not take any action until the Civil Justice Counsel (CJC) completes its review, which is currently expected in summer 2025.

With no imminent legislative intervention, the Court of Appeal has determined that there is no longer good reason to delay these cases further.

The Court of Appeal will list a hearing of one or two days between the end of May and the end of July 2025 to determine the validity of the ‘multiple approach’ in these five cases.

The ruling could have far-reaching consequence for litigation funders, claimants and competition litigation more broadly. If the Court of Appeal sides with the defendants, it may further restrict funding models in the CAT proceedings, forcing funders to rethink their strategies once again. On the other hand, absent a further appeal to the Supreme Court, a decision in favour of the multiple approach would provide much needed clarity and a potential path forward for funders in the wake of PACCAR.

For more information on litigation funding, take a look at our resources:

• How does litigation funding work in the UK?
• How can litigation funding help your business
• Litigation funding: 10 things you need to know

Or contact our specialist Litigation Funding team for further guidance.