The competitive standing of the UK’s litigation funding sector ranks behind rivals such as Singapore, New York and Pennsylvania, with ‘alarming warning lights on the dashboard’ for the UK, according to a report published today.
In a foreword to the report, which measures funding in seven jurisdictions against the three core criteria of certainty, viability, and efficiency, Lord Carlile of Berriew (Alex Carlile KC) described its findings as ‘both instructive and sobering’. He said: ‘The assessment of the UK’s position is behind that of Singapore and the US… The UK has not yet received a fail, but there are alarming warning lights on the dashboard. Our competitors are not standing still, and several of them have built frameworks that are, in important respects, more commercially predictable than our own.’
The study, commissioned by settlement administrators Angeion Group, scored England and Wales with an ‘amber’ rating for all three of its core criteria; beaten by Singapore, which scored green for each, and New York and Pennsylvania, which were rated green for both certainty and viability, and amber for efficiency. Australia also ranked higher than England and Wales overall.
The research pointed to the failure of successive governments to reverse the Supreme Court’s 2023 PACCAR ruling as the ‘main drawback’ of the UK. One broker interviewed for the study described a ‘marked increase in approaches from lawyers struggling to place cases that would previously have attracted funding without difficulty’, noting that PACCAR-driven uncertainty had ’materially reduced the capital available for litigation funding’. Claimant lawyers also reported difficulties in securing funding post-PACCAR, while funders themselves said it has become harder to raise new capital.
The report highlighted regulatory uncertainty as a further downside to the UK, with the government yet to indicate when it will act on the Civil Justice Council’s recommendations for litigation funding reforms. ‘Funders commit capital across multi-year investment horizons, and the absence of clarity over when changes will be implemented and how they will apply to cases already in progress compounds the duration risk that already weighs on returns,’ the report said. ‘New rules are also likely to generate satellite litigation as parties test their scope and application, prolonging cases beyond their current expected timelines.’
The research identified the slow pace of UK justice as another blow to the sector. It said: ‘Even where the UK’s procedural framework is well established, the time taken to resolve complex funded cases can test the limits of funder and claimant commitment alike. In Road Haulage Association Limited v Man SE and Others (2018),33 the RHA’s collective claim on behalf of over 11,000 small haulage businesses, many of them family-run operations, remains unresolved nearly a decade after the European Commission’s 2016 decision finding that five major truck manufacturers had engaged in price-fixing for 14 years. The number of participating claimants has fallen from a peak of 17,500 to around 11,400, with businesses lost to closures, deaths, and disillusionment with the pace of proceedings.’
Jade Tess Weiner, vice president of group actions at Angeion, said: ‘The international market for litigation funding is no longer static. Markets such as Singapore, New York, and the Netherlands have positioned themselves as attractive venues for funded disputes, while other jurisdictions have experienced the consequences of regulatory uncertainty or procedural delay. The UK therefore faces a strategic choice: whether to reinforce and modernise its existing strengths, or risk ceding competitive ground to comparator jurisdictions’.
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