UK Court of Appeal confirms that litigation funders can receive a share of damages prior to distribution to class members
May 14, 2025
UK Court of Appeal confirms that litigation funders can receive a share of damages prior to distribution to class membersMay 14, 2025 What is the background?Competition class actions remain a continuing theme in the UK, with 56 active claims currently before the Competition Appeal Tribunal (“CAT”). Those claims have an estimated combined damages value in excess of £160 billion. The expansion of the UK competition class actions regime has been driven in part by the availability of litigation funding. However, the funding arrangements for collective proceedings have been the subject of judicial scrutiny in a number of cases, most notably by the Supreme Court in its 2023 decision in PACCAR finding that certain litigation funding agreements are unenforceable in the context of opt-out collective proceedings. For more information, see our previous briefing here. In Gutmann v Apple, the Court of Appeal considered two related questions in relation to the funding arrangements:
What was the outcome?The Court of Appeal held that:
Key to the Court of Appeal’s decision was the fact that, regardless of the terms of the LFA, the CAT has overriding supervisory powers to control the timing of and the amounts paid to a funder as a return on their investment. What next?The Defendant’s third ground of appeal, that the LFA is unenforceable in light of the Supreme Court’s decision in PACCAR, will be heard alongside a number of related cases in June 2025. Latest InsightsLatest News
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