The CJC’s latest report rewrites the rules of litigation funding, keeping the scales tipped in favor of industry insiders. Image Source: iStock

The Civil Justice Council (CJC) published its final report on litigation funding in the UK on June 2, 2025, proposing to reverse the 2023 Supreme Court PACCAR decision while rejecting limits on third-party funders’ profits. While positioned as a neutral review, the report’s recommendations reflect the priorities of the litigation funding industry and leave significant gaps in regulatory safeguards for consumers.

Reversing PACCAR: A Windfall for the Industry

The PACCAR judgment declared many litigation funding agreements unenforceable by categorizing them as “damages-based agreements” (DBAs) subject to strict statutory requirements. This upended the litigation funding landscape, delayed claims, and left funders scrambling for legal certainty. The CJC now urges Parliament to reverse that ruling through legislation, recommending that “the effect of the Supreme Court’s decision [should] be reversed by legislation, which should be both retrospective and prospective in effect” (Civil Justice Council Report, p. 8).

This recommendation would retroactively reinstate previously invalidated funding contracts and prospectively shield funders from similar legal disruptions. While presented as a measure to improve access to justice, it also raises concerns about whether clients might be financially disadvantaged by having to remit portions of past awards to funders—after the fact. This could retroactively alter the financial outcomes of past litigation, creating legal uncertainty for claimants and opening the door for funders to recoup profits from finalized judgments—regardless of the impact on the individuals originally awarded those funds.

From ‘Light-Touch’ to No-Touch Regulation

Despite acknowledging that “self-regulation is inappropriate now given that the litigation funding industry is now well-established” (p. 60), the CJC hesitates to impose enforceable oversight. The report repeatedly uses the phrase “light-touch regulation” to describe its preferred model—suggesting minimal change rather than robust reform. Although it concedes that the Lord Chancellor could be granted oversight authority, it couches this in tentative language: “if regulation were to be introduced,” it should remain limited (p. 61).

Most notably, the report excludes arbitration from oversight altogether: “Where arbitration is concerned, it was also said that there is no reason to bring it within regulation” (p. 61). This omission is particularly significant given that arbitration is a major source of profit for litigation funders. Arbitration proceedings are often transnational, high-stakes, and less transparent—making them attractive for funders seeking large returns while avoiding scrutiny. By shielding arbitration from regulatory proposals, the report preserves one of the industry’s most lucrative domains.

This approach directly contradicts the warnings of major oversight bodies.

This approach directly contradicts the warnings of major oversight bodies. The Legal Services Board has cautioned that the current framework “has not been sufficient to protect consumers in the context of its rapid expansion,” warning that “the growth in third-party litigation funding exposes consumers to increased risk of harm, such as funders exerting undue control over the litigation process and attempting to achieve excessively high financial returns.” It further argues that the current framework “undermines trust and confidence in third party litigation funding, and consequently legal services.”

The Bar Council echoed these concerns, concluding that “the current model of self-regulation ...has not worked.” These evaluations from respected legal bodies underscore a shared belief that the industry cannot be left to police itself.

Adding to these critiques, the CJC’s consultancy team included several figures with deep commercial interests in litigation finance—most notably Neil Purslow, co-founder and Chief Investment Officer of Therium Capital Management. With the same individuals simultaneously shaping industry norms and public policy, the report reads less like a regulatory blueprint and more like an internal industry memo. Purslow also serves on the board of the Association of Litigation Funders (ALF), the very self-regulatory body the Bar Council declared “has not worked.”

The report reads less like a regulatory blueprint and more like an internal industry memo.

Moreover, The European Law Institute warned that ‘prominent players’ in litigation funding—specifically naming Therium—“do not by any means represent the entirety of the market.” Yet one of these same players, Purslow, was a direct representative in shaping the entirety of the market. His participation further blurs the line between industry lobbying and public policy, raising concerns about whose interests the report ultimately serves.

Compounding the sense of a predetermined outcome, Purslow confidently predicted in April 2024 that the Litigation Funding Agreements (Enforceability) Bill “will reverse the PACCAR decision and reestablish the Government’s original policy intent… restoring the ability of funders to offer funding to as many cases as possible.” That the CJC published a review so aligned with this vision—months after industry leaders had publicly anticipated it—suggests the process was more ceremonial than substantive. The timing, tone, stakeholder composition, and absence of meaningful regulatory change all reinforce the impression that this was a review produced to validate a preordained agenda.

This was a review produced to validate a preordained agenda.

Instead of embracing independent oversight, the CJC proposes regulatory ambiguity—preserving a status quo that favors commercial funders. Even its suggestion of a five-year review lacks any clear start date, performance metrics, or triggers for stronger oversight. This vagueness enables litigation funders to continue operating with minimal scrutiny, while leaving claimants and the legal system increasingly vulnerable to financial exploitation.

Actual ‘Evidence of Harm’

Unsurprisingly, Purslow has also been one of the most vocal defenders of the industry’s established system. Responding to the Legal Services Board’s warnings about consumer harm, he previously stated: “I think the main question here is: is there actually any evidence of harm to consumers in third party funding arrangements? We're not aware that there is.”

Yet Purslow’s assertion is contradicted by multiple high-profile cases. In Excalibur Ventures v. Texas Keystone, funders financed a speculative and ultimately meritless lawsuit. The court found that they had failed to conduct proper due diligence and acted irresponsibly by bankrolling a legally weak and ethically questionable claim. The consequences were far-reaching: defendants endured prolonged and costly litigation, while claimants—propped up by funders—burdened the court system with a baseless case. Harm extended beyond finances, undermining judicial integrity and misallocating public legal resources.

Similarly, in Sulu v. Malaysia—a widely criticized arbitration financially backed by Purslow’s own Therium—funders pursued a staggering $14.92 billion claim rooted in colonial-era treaties. Despite serious concerns about the legal standing of the claimants, Purslow’s firm pushed forward. Although the Paris Court of Appeal ultimately annulled the award, the damage had already been done. The case placed Malaysia’s sovereign assets at risk and enabled exploitation of global legal systems for private financial gain. At stake was not only financial equity, but geopolitical stability and diplomatic relations in Southeast Asia.

At stake was not only financial equity, but geopolitical stability.

This is not “access to justice,” as Purslow has claimed—it is access to injustice, where litigation funders, not claimants, drive legal strategies to maximize returns, even when doing so undermines client interests and threatens broader public values such as international stability and peace.

If third-party funding truly posed no risk of harm, the PACCAR ruling would not have been necessary. That decision—and the industry’s aggressive push to reverse it—speaks volumes about the dangers of unchecked financial influence in the justice system.

Toward Accountability, Not Industry Accommodation

The CJC’s report reveals a pattern of deference to the litigation funding industry. By advocating to reverse the PACCAR ruling and reinstate previously unenforceable agreements, while opposing caps on funder profits and promoting “light-touch” regulation, if any regulation, the report aligns more closely with commercial funder priorities and Purslow’s self-fulfilling prophecies, than with public protections.

The CJC’s report reveals a pattern of deference to the litigation funding industry.

These recommendations sidestep key consumer safeguards. Rather than implementing mechanisms that ensure transparency, ethical conduct, and fair outcomes, the report codifies a framework of flexibility for funders and ambiguity for everyone else. Even its proposed five-year review offers little reassurance, as it lacks a clear timeline, accountability benchmarks, or claimant-centered evaluation metrics.

Compounded by the industry insider narrative and a tone of quiet assurance, the CJC’s process appears to have been performative: a review seemingly conducted to fulfill formal obligations and to placate public opinion, rather than to challenge real systemic issues. The result is a legal system increasingly molded by capital rather than guided by the pursuit of justice.

REFERENCES

Civil Justice Council. (2025, June 2). Review of litigation funding: Final report. Judiciary of England and Wales. https://www.judiciary.uk/wp-content/uploads/2025/06/CJC-Review-of-Litigation-Funding-Final-Report.pdf

European Law Institute. (2021). ELI principles for the funding of litigation by third parties. https://www.europeanlawinstitute.eu/fileadmin/user_upload/p_eli/Publications/ELI_Principles_Governing_the_Third_Party_Funding_of_Litigation.pdf

European Parliamentary Research Service. (2023). Responsible private funding of litigation in the EU. https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2023)739314

High Court of Justice. (2013). Excalibur Ventures LLC v. Texas Keystone Inc and others. https://www.bailii.org/ew/cases/EWHC/Comm/2013/4278.html

Legal Funding Journal. (2024, April 29). An LFJ conversation with Neil Purslow. https://legalfundingjournal.com/lfj_conversations/an-lfj-conversation-with-neil-purslow/

Legal Services Board. (2025, March). Response to CJC review of litigation funding. https://legalservicesboard.org.uk/wp-content/uploads/2025/03/Legal-Services-Board-CJC-Review-of-Litigation-Funding.pdf

Womack, J. (2025, June 2). UK litigation funding report urges government to overturn PACCAR. Law.com International. https://www.law.com/international-edition/2025/06/02/long-awaited-uk-litigation-funding-report-published-calls-on-government-to-overturn-paccar/?slreturn=2025060340338