Recent UK court rulings and government reforms have brought major changes to litigation funding, addressing challenges after the July 2023 PACCAR judgment.

Published: 16 April 2026
Authors: Kiran Desai

The PACCAR judgment was a significant issue for funders, with one funder identifying that for arbitration matters the company ‘no longer [names] London as an arbitral seat’, with alternatives apparently being Singapore, Paris and New York. However, pragmatic judicial decisions seem to have calmed the waters and the dominant response by funders to the government’s announcement in December 2025 was one of relief.

For funders, the proposed legislative changes have not only restored confidence but also opened new avenues for growth and investment. Statutory clarity offers increased security for those underwriting litigation, making the UK market particularly attractive for institutional capital. This development is likely to encourage funders to expand their portfolios and consider new strategies within the sector.

One legal market commentary identifies that ‘the "Market Heating" effect is immediate. The 2026 legislation doesn't just return the market to 2023; it supercharges it. By providing statutory clarity, the government has essentially de-risked the asset class for institutional investors and pension funds’.

For the full description of these and other judicial developments affecting litigation funding, a description of the government’s announcement, and a commentary on the current and prospective situation for litigation funders, see the article published in the latest edition of European Competition and Regulatory Review, published by Lexxion.