Leading Firms Urge Government to Reverse PACCAR Ruling Amid Decline in Collective Actions

Twenty of the UK’s leading law firms and claimant groups have written to newly appointed Lord Chancellor David Lammy, urging the government to introduce emergency legislation reversing the Supreme Court’s landmark PACCAR decision, which they say has crippled litigation funding and undermined the country’s reputation as a global hub for dispute resolution.

The joint letter—signed by firms including Leigh Day, Mishcon de Reya, Stewarts, Scott+Scott UK, Freeths, and Milberg London—warns that the “future of group actions in the UK is under threat” as claimants with limited means struggle to secure financing and funders divert capital to other jurisdictions: “Claimants with limited means are struggling to access funding to bring their cases, and investment from funders is draining away from the UK legal system,” the signatories wrote. “We call on the Government to act swiftly and legislate for the sake of claimants and the reputation of the UK’s justice system.”

Access to justice at risk

The letter highlights the central role litigation funding plays in enabling ordinary citizens to take on powerful corporate defendants—citing the subpostmasters, truck hauliers, and retail investors among those whose landmark claims would have been impossible without third-party capital. It follows renewed calls from claimants such as Sir Alan Bates and others leading collective actions against water companies and manufacturers.

“Group actions in the UK play a pivotal role in enabling individuals to come together to bring claims against those accused of wrongdoing—often multinational corporations with significant resources,” the letter states. “However, that system is now under threat thanks to the disruptive effects of the PACCAR judgment.”

Fallout from PACCAR

The 2023 Supreme Court ruling in R (on the application of PACCAR Inc. and others) v Competition Appeal Tribunal found that many litigation funding agreements qualify as damages-based agreements (DBAs)—and are therefore unenforceable unless they meet the strict statutory requirements of the DBA Regulations. The decision invalidated hundreds of existing funding agreements and cast doubt over the legality of new ones, freezing capital deployment across the collective redress market.

The Civil Justice Council (CJC) completed its government-commissioned review of litigation funding earlier this year, urging “urgent standalone legislation” to reverse the effects of PACCAR. Despite that clear recommendation, the government has so far declined to act, saying only that the review would “inform the approach to potential reforms in due course.”

The signatories accuse ministers of failing to follow their own evidence-based principles. “The independent experts have provided the evidence that this issue needs fixing,” they wrote. “Yet this Government refuses to act, delaying justice for some and denying justice for future claimants.”

Market impact and funder exodus

The PACCAR fallout has coincided with a marked slowdown in collective proceedings before the Competition Appeal Tribunal (CAT). According to data from Solomonic, reported by the Financial Times, filings dropped sharply in 2024—a trend many in the industry attribute to funders’ retreat following the ruling.

“This uncertainty is already having real-world consequences,” said Neil Purslow, chair of the executive committee of the International Legal Finance Association (ILFA). “Meritorious claims are going unfunded, alleged wrongdoers are unchallenged, and competition—one of the great drivers of growth—is not being enforced. The Government must act before this small trickle of cases dries up altogether.”

Martyn Day, co-founder of Leigh Day and co-president of the Collective Redress Lawyers Association (CORLA), echoed the warning: “This issue has created a great deal of uncertainty that is blocking access to justice for ordinary people taking on powerful corporations. The system simply cannot work without litigation funding.”

Major funders have already begun reallocating resources. Burford Capital CEO Chris Bogart recently said the company has started “migrating some dispute resolution away from London” in response to the PACCAR fallout, calling the lack of legislative clarity a barrier to future UK investment.

Urgent calls for legislative clarity

The letter, coordinated by CORLA, represents one of the most unified interventions yet from the claimant bar. Its authors argue that without swift legislative correction, the UK risks losing its hard-won reputation as a premier forum for complex dispute resolution and collective redress.

“The CJC report gave the Government everything it needed to act,” the firms wrote. “Reversing PACCAR would be a quick and simple fix to restore confidence in the market.”

The stakes are particularly high for consumers and small businesses. Litigation funding has become integral to enforcing competition law, consumer rights, and mass tort claims. Without it, say the signatories, “justice will once again depend on who can afford it.”