Vol 20 (2023) - Issue 5

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R (on the application PACCAR Inc) v Competition Appeal Tribunal and others [2023] UKSC 28: What Are the Implications for Third Party Finance of Insolvency Litigation?

Synopsis
The UK Supreme Court decision in R (on the application of PACCAR Inc) v Competition Appeal Tribunal and others [2023] UKSC 28 ('PACCAR') was somewhat unexpected when first handed down on 26 July 2023, resulting in much speculation as to the way forward for third party litigation funding.
The consensus before the decision in PACCAR was that the regime under s.58AA of the Community and Legal Services Act 1990 ('CLSA') and the Damages Based Agreements Regulations 2013 ('the Regulations') did not apply to funding agreements such as those in that case.
It was held by a majority of four to one in the Supreme Court that the provision of financial services constitutes 'claims management services' and that a litigation funding agreement is a Damages Based Agreement ('DBA') which will be unenforceable unless it complies with the Regulations.
In relation to the finance of insolvency litigation, is PACCAR a cause for alarm, or is it business as usual?