Litigation Funding Under Scrutiny - Avoiding Costly Mistakes

Introduction

Few areas of practice have moved as quickly, or as unpredictably, as litigation funding.

Three years after PACCAR, the Government has promised legislation, but no Bill has yet been introduced. The Civil Justice Council’s June 2025 recommendations await implementation.

The SRA is scrutinising how firms explain and manage ‘no win, no fee’ arrangements and third-party funding. Meanwhile, the courts continue to penalise firms that get the basics wrong.

This bitesize webinar explores the common mistakes that can lead to disallowed success fees, unenforceable agreements, client complaints and regulatory scrutiny and offers straightforward tips to help you avoid them.

On completion of this webinar, you will know what has changed, what remains uncertain and what to check in your own funding documentation now.

What You Will Learn

This short webinar will cover the following:

• Client care and costs information: what the SRA’s January 2026 warning notice on ‘no win, no fee’ arrangements expects in practice, from clear explanations of success fees and deductions from damages to checking that clients have genuinely understood them
• Investigating alternative funding: why Evans v Fletchers Solicitors [2026] where a success fee of over £30,000 was disallowed after inadequate enquiries into the client’s legal expenses insurance, makes checking for BTE cover essential rather than a box-ticking exercise
• Conditional Fee Agreements (CFA) and Damages Based Agreements (DBA): the drafting and documentation errors that still undermine enforceability and recovery and practical approaches while the DBA Regulations 2013 remain unreformed
• Third-party funding after PACCAR: the position following Sony Interactive Entertainment Europe Ltd v Alex Neill Class Representative Ltd, which confirmed that funder returns based on a multiple of outlay are not DBAs and the Government’s commitment to reverse PACCAR with prospective effect ‘when parliamentary time allows’
• Regulation on the horizon: the SRA’s proposals for firms using or arranging third-party funding in consumer claims, including notification, funding risk assessments and client summary document, and the Department for Business and Trade’s proposed reforms to funding and certification in CAT collective actions
• The Civil Justice Council’s Final Report: the key recommendations on light-touch statutory regulation of funders, a single contingency fee regime to replace CFAs and DBAs and urgent DBA reform and how to future-proof your agreements while implementation remains uncertain
• A short checklist of top tips to reduce risk and protect recovery across every funding arrangement