UK Supreme Court · UK · 2023 · Decided; largely mitigated by later cases
Citation/Docket: [2023] UKSC 28
Posture: Enforceability of percentage-based LFAs
Funder(s) involved: (Industry-wide impact)
The Supreme Court held LFAs paying funders a percentage of damages are 'damages-based agreements', unenforceable in opt-out CAT proceedings unless DBA-compliant.
Threw hundreds of UK funding agreements into doubt overnight; funders rewrote LFAs around multiples of outlay.
Regulatory characterization risk can strike an entire market at once. Post-PACCAR: Court of Appeal upheld revised/'future-proofed' LFAs in Sony v. Neill (2025), and the Supreme Court refused further appeal (Nov. 2025).
Following PACCAR, the Court of Appeal upheld revised, 'future-proofed' funding agreements in Sony v. Neill (2025), and the UK Supreme Court refused a further appeal in November 2025, giving funders a workable path forward after the initial disruption.
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Compiled from public sources (court filings, published opinions, and secondary reporting) as part of the Institute's Phase 1 Dispute Library research. This is educational material, not legal advice; case citations should be independently verified before relied upon.