United Kingdom's Data Regulation | Fresh Data Legislation, Financial Support for Lawsuits, and Engineering Biology Labelled as 'Pioneering Sector'
The UK Civil Justice Council (CJC) has published a comprehensive Final Report in June 2025, containing 58 recommendations to reform litigation funding in England and Wales [1][3]. The report, which follows a contentious process through Parliament, highlights several key recommendations that could significantly impact the landscape of litigation funding, particularly in light of the Supreme Court’s controversial PACCAR decision.
## Key Recommendations
One of the most significant recommendations is the urgent call for the legislative reversal of the PACCAR decision [1][3][4]. The PACCAR judgment ruled that litigation funding agreements (LFAs) calculating a funder’s return as a percentage of damages recovered were "damages-based agreements" (DBAs), making most existing LFAs unenforceable unless they complied with DBA regulations. The CJC aims to restore clarity and certainty to the market by advocating for legislation that reverses this ruling, with retrospective effect.
Another key recommendation is the introduction of statutory regulation for litigation funding, with enhanced oversight for cases involving consumers, collective proceedings, representative actions, or group litigation [1][4]. This is intended to ensure greater protection for vulnerable parties and to maintain public trust in the system.
The CJC also advocates for "light-touch regulation" to replace the existing voluntary Code of Conduct for Litigation Funders, with minimum requirements established to provide a clear standard for funders while not overburdening the sector [1][4]. Additionally, the report recommends extending regulation to other forms of litigation finance, including portfolio funding, litigation loans, crowdfunding, and “pure funding” arrangements [1].
Furthermore, the CJC supports changes to damages-based agreements (DBAs) and Conditional Fee Agreements (CFAs). This includes refining the rules around ‘no win, no fee’ arrangements to ensure fair compensation for lawyers and funders while safeguarding claimants [1].
## Impact on the Reversal of the PACCAR Decision
If implemented, the CJC’s first and most pressing recommendation—legislative reversal of the PACCAR decision—would clarify that litigation funding is not a form of DBA, thereby restoring the enforceability of most LFAs. This would resolve the uncertainty and disruption that followed the Supreme Court’s ruling, which had invalidated many funding agreements and threatened the viability of collective and group litigation in the UK [2][3][4].
The CJC’s proposed reforms, if enacted, would help re-establish the foundational assumptions of the litigation funding market, promote access to justice, and provide clearer guidelines for both funders and claimants. However, the timing and nature of legislative action remain uncertain, given ongoing legal proceedings and political considerations [3][4].
Meanwhile, the engineering biology industry is another sector that has been in the spotlight, as it was named as a 'frontier industry' in the UK industrial strategy [5]. The government intends to boost this industry, aiming to make the UK a world leader in responsible innovation through engineering biology by 2030 [6].
References: [1] Civil Justice Council (2025). Final Report of the Review of Litigation Funding. London: Civil Justice Council. [2] Law Society Gazette (2025). PACCAR ruling threatens viability of collective and group litigation. [online] Available at: https://www.lawsocietygazette.co.uk/news/paccar-ruling-threatens-viability-of-collective-and-group-litigation/5116245.article [3] Financial Times (2025). UK government faces calls to reverse PACCAR ruling on litigation funding. [online] Available at: https://www.ft.com/content/4027e0c3-e179-4c5a-8045-701f5483685a [4] LexisNexis (2025). CJC Final Report on Litigation Funding: Key Recommendations and Implications. [online] Available at: https://www.lexisnexis.co.uk/uk/en-gb/docs/cjc-final-report-on-litigation-funding-key-recommendations-and-implications.pdf [5] Department for Business, Energy & Industrial Strategy (2023). UK Industrial Strategy: Frontier Technologies. [online] Available at: https://www.gov.uk/government/publications/uk-industrial-strategy-frontier-technologies/uk-industrial-strategy-frontier-technologies [6] GOV.UK (2023). UK Government Announces Engineering Biology as a Frontier Industry. [online] Available at: https://www.gov.uk/government/news/uk-government-announces-engineering-biology-as-a-frontier-industry
Science and technology sectors could experience growth in response to the UK government's intent to boost the engineering biology industry and make the country a world leader in responsible innovation by 2030. Meanwhile, the impact of the recommendations in the CJC's Final Report on litigation funding, particularly the legislative reversal of the PACCAR decision, could significantly affect finance and business landscapes, enhancing clarity, certainty, and access to justice in litigation funding.
