DAF Appeal in UK Supreme Court Could Endanger Third-Party Funding

As the European Union considers proposals for enhanced regulation and oversight of third-party litigation funding on the continent, there has been much speculation that the UK’s litigation finance industry could benefit from representing a more welcoming market. However, an ongoing appeal by the defendant in two group claims has the potential to disrupt the status quo of litigation funding in the UK, and create major problems for funders operating in the country.

An article by Reuters provides an update on the appeal by truck manufacturer DAF, which is now set to be decided by the UK’s Supreme Court. DAF’s has been appealing two lawsuits brought by two groups of truck owners at the Competition Appeal Tribunal (CAT), which allege that that company took part in a cartel that fixed prices and slowed the progress of engine technology that reduced harmful emissions.

DAF’s appeal centers around the argument that the claimant groups engaged in funding agreements that fail to comply with regulations that outline the parameters of damages-based agreements. DAF’s lawyer, Bankim Thanki, argued that the Supreme Court should not consider any effects on the wider litigation finance industry, as they are irrelevant to the validity of the appeal.

However, the Association of Litigation Funders (ALF) has argued that if the court upheld the appeal on these grounds, then it would put the UK litigation funding industry “in a state of disarray”. The Royal Haulage Association (RHA), which brought one of the original cases against DAF, has highlighted that by permitting the defendant’s appeal, the court would seriously endanger every single collective proceeding in the UK, which all involve funding agreements.