Why UK PLC needs third party funding now, more than ever

The Civil Justice Council is undertaking a major review of third party litigation funding (TPF), which prompted input from litigators, funders and policy experts as part of a consultation which closed on 3 March 2025. In an article for Legal Business, Ned Beale and Lucy Pert argue that litigation funding plays a critical role in supporting the UK’s legal sector, an economic powerhouse that contributed £37bn to the UK economy in 2023. They highlight how the country’s unique combination of legal tradition, respected judiciary and a thriving financial services industry has helped establish the UK as a global hub for legal innovation, and how litigation funding can emerge as a key driver of this growth.

They emphasise that third party funding not only enables impecunious claimants to bring disputes even against the largest defendants and gives well-resourced claimants flexibility to take litigation costs off balance sheet, but that it also aligns with the government’s pro-growth agenda by promoting efficient, merit-based litigation. They suggest light-touch regulation, and advocate for targeted reforms, such as resolving issues arising from the PACCAR judgment and modernising Damages-Based Agreements. They argue that the existence of TPF should not engender a US style claims culture because of how funders themselves assess risk and the checks and balances that already exist in this jurisdiction such as the ability of defendants to strike out vexatious claims and costs shifting. Already impacted by Brexit, the UK legal sector must maintain its position at the forefront of international disputes and increased funding could bring both economic and societal benefits, from faster dispute resolution to enhanced access to justice for individuals and SMEs facing powerful defendants.

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