Litigation Funding Agreements (Enforceability) Bill debated in the Lords

Litigation funding agreements (LFAs) are arrangements whereby a third-party funder pays for legal costs in return for a share of damages if the case is won. In July 2023, the Supreme Court ruled that an LFA can be considered a damages-based agreement (DBA) in certain circumstances.

The aim of the Litigation Funding Agreements (Enforceability) Bill is to reverse the Supreme Court's decision, as DBAs are subject to different legislative requirements which may make LFAs unenforceable.

Debate on the draft law

During second reading, members discussed the main topics in the bill and drew attention to specific areas of concerns where they think amendments (changes) are needed.

Members speaking

Contributing members included:

• Lord Marks of Henley-on-Thames (Liberal Democrats), barrister and fellow of the Chartered Institute of Arbitrators
• Lord Ponsonby of Shulbrede (Labour), magistrate and Lords opposition spokesperson for justice affairs
• Lord Sandhurst (Conservative), barrister and former council member of human rights and law reform charity, JUSTICE
• Lord Thomas of Cwmgiedd (Crossbench), arbitrator and former Lord Chief Justice of England and Wales.

Lord Stewart of Dirleton (Conservative), Advocate General for Scotland, opened the debate and responded on behalf of the government.

Catch up

• Watch the Parliament TV recording.
• Read the Lords Hansard transcript.

Explore further information

Find out more about the bill in the House of Lords Library briefing.

Next steps

Committee stage, the first chance for line by line examination of the bill, is scheduled to begin on Monday 29 April. 

Image: Francais a Londres / Unsplash