ESG and Litigation Funding

Public
Frustration is mounting over the UK government's failure to act on reversing the Supreme Court's 2023 PACCAR decision, with former members of the body that reviewed litigation funding warning that prolonged delay is damaging the market and eroding Britain's standing as a global dispute-resolution hub. Nearly three years on from the ruling, no corrective legislation has materialized.
As reported by the Law Society Gazette, Nicholas Bacon KC and Dr John Sorabji, both former members of the Civil Justice Council's working party on litigation funding, voiced sharp disappointment at the lack of progress. Bacon called the inertia "terribly frustrating" and warned that delay leaves cases trapped in satellite litigation, while Sorabji said the 14-month wait was incomprehensible given the urgency the CJC's report stressed and the ongoing market uncertainty.
The PACCAR ruling reclassified many litigation funding agreements as damages-based agreements, potentially rendering them unenforceable and triggering a wave of disputes over existing arrangements. The Civil Justice Council's review recommended urgently reversing the decision through retrospective legislation, a recommendation the government accepted, alongside a December 2025 pledge from courts minister Sarah Sackman KC to clarify that funding agreements are not damages-based agreements.
Yet no bill has emerged, and the King's Speech contained no provisions on the issue, with employment minister Kate Dearden recently citing the complexity of the review as justification for further time. Reformers warn that continued inaction risks pushing funded cases and investment toward rival jurisdictions, jeopardizing the UK's competitive advantage in international dispute resolution.
Booking.com is facing a planned £2 billion collective action in the UK's Competition Appeal Tribunal over the pricing provisions in its contracts with hotels, in a claim financed by litigation funder Balance Legal Capital. The case is the latest example of third-party capital powering large-scale, opt-out consumer claims against major technology platforms.
As reported by MLex, the proposed claim will be brought before the Competition Appeal Tribunal on behalf of millions of UK consumers, with proposed class representative Chris Warner alleging that buyers have systematically overpaid for hotel and travel accommodation. Total damages are estimated at more than £2 billion, and the claim is expected to be filed at the tribunal soon.
At the heart of the case are the pricing provisions in Booking.com's agreements with hotels, which the claim contends harmed consumers by inflating the prices they paid. Such "price parity" arrangements have drawn sustained competition-law scrutiny across Europe, providing a foundation for follow-on damages claims of the kind now taking shape in the UK.
The case underscores the central role litigation funders continue to play in the UK's collective proceedings regime, where the scale and cost of opt-out claims make outside capital essential. Balance Legal Capital's backing allows a single representative to pursue redress on behalf of millions of consumers who could not realistically litigate individually. The filing also lands amid intensifying debate over the future of funded collective actions in Britain, as reformers press the government to restore certainty to litigation funding agreements in the wake of the PACCAR ruling.
As India weighs how to modernize the financing of disputes, senior advocate Mahesh Agarwal has staked out a clear position: third-party litigation funding should be formally recognized, but lawyers should not be permitted to take a financial stake in the cases they handle. His comments add a prominent voice to a growing debate over how far India's legal market should go in embracing outside capital.
As reported by Bar and Bench, Agarwal drew a sharp distinction between third-party funding and lawyer participation in outcomes. While supportive of recognizing litigation funding as a legitimate, separate mechanism, he firmly opposed success fees for attorneys, saying, "a lawyer or a law firm getting involved or taking a stake in the litigation, I think we are not that mature as of now."
His concern centers on professional integrity, with Agarwal arguing that India's legal system is not yet equipped to manage arrangements in which attorneys profit directly from the results they secure for clients. The distinction mirrors the approach taken in several jurisdictions that permit third-party funding while restricting contingency-style lawyer compensation.
Agarwal also voiced unease about the state of Indian arbitration, observing that it "has lost respect" amid mounting delays and challenges, and suggested mediation may prove more effective for resolving commercial disputes. He further criticized "no order as to costs" practices that allow parties to litigate without financial consequence, encouraging prolonged and frivolous disputes. Taken together, his remarks frame litigation funding as a tool that could strengthen access to justice in India, provided it is introduced with appropriate guardrails.