Department for Business and
Trade statement on PACCAR
The Department for Business
and Trade issued statement in response to the Supreme Court's decision in R
(on the application of PACCAR Inc) v Competition Appeal Tribunal [2023]
UKSC 28.
By a 4 to 1 majority, the
Supreme Court held that litigation funding agreements (LFAs), where the funder
plays no part in the conduct of the litigation but their remuneration is based
on a percentage of any damages recovered, are damages-based agreements (DBAs). As such they will be unenforceable unless
they comply with the relevant regulatory regime for DBAs.
This situation has led many
observers to speculate whether legislative change may be forthcoming as only
this would seem to reverse the position.
The Department of Business and
Trade has stated briefly that it "is aware of the Supreme Court decision
in Paccar and is looking at all available options to bring clarity to all
interested parties". The statement
is striking in its brevity.
2022/23 has been important for
the development of collective private enforcement actions for breach of
competition law. Some funding agreements
will need to be revised to reflect the Supreme Court’s recent ruling. Navigating the future landscape will require
a delicate balancing exercise between proportionality, fairness and reasonable
cost.
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