An amendment filed to the Digital Markets, Competition and Consumers Bill last week will allow the use of damages-based agreements (DBAs) for opt-out collective proceedings heard in the Competition Appeal Tribunal, but only for litigation funders. The proposed amendment responds to the Supreme Court’s decision in PACCAR in July this year, which ruled that litigation funding agreements that allowed funders to recover a percentage of damages were prohibited.
The judgment left funders racing to renegotiate existing agreements in order to be able to enforce them, despite remaining adamant that they were optimistic about the industry as a whole. If this amendment is successful, renegotiation will be unnecessary, as litigation funding agreements (LFAs) based on percentages will remain viable.
