This Trend is changing the Litigation industry

Litigation funding—where third-party companies pay legal costs upfront in exchange for a share of the winnings—has become a key part of the legal system in England and Wales. It allows people and businesses to bring claims they might not otherwise afford, especially in big group cases like competition claims or shareholder actions.

But now, the government is reviewing whether litigation funding needs stricter rules, sparking a fierce debate among law firms, funding companies, and legal regulators. If big changes are made, it could affect access to justice, the cost of bringing lawsuits, and how much money funders can make.

At the heart of the debate are three major questions: Should litigation funding be formally regulated? Should funders' returns be capped? And how should an important ruling called the PACCAR ruling be addressed?

Should Litigation Funding Be Regulated?