Overview

This bill amends the Courts and Legal Services Act 1990 to clarify the legal enforceability of litigation funding agreements in England and Wales. It specifically distinguishes these agreements from damages-based agreements, ensuring that funding arrangements for legal cases are properly regulated.

Description

The bill modifies section 58AA of the Courts and Legal Services Act 1990. It introduces a new definition of "litigation funding agreement." This is defined as an agreement where a third party (the funder) finances, wholly or partly:

• Legal representation for a litigant.
• Expenses for litigants in person.
• Costs a litigant might owe due to a court order, arbitration, or settlement.

In return, the litigant agrees to make payments to the funder as specified in the agreement. Crucially, the bill explicitly states that such litigation funding agreements are not considered damages-based agreements. The amendments are considered to have always had effect from the date of enactment.

Government Spending

The bill is not expected to have a significant direct impact on government spending. The changes primarily affect the legal framework surrounding litigation funding, not the level of public expenditure.

Groups Affected

• Litigants: The bill will impact individuals and organizations pursuing legal action who utilize litigation funding. The clarity provided may increase access to funding for some but may also affect the terms of their agreements.
• Litigation Funders: The bill's provisions will affect companies and individuals providing litigation funding. They will need to ensure their agreements are compliant with the new definition.
• Lawyers: Lawyers who work with litigants who use litigation funding may see changes to their working relationships and agreements.
• Courts: The courts will have to interpret and apply the new legal definition when considering cases involving litigation funding agreements.

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