Competition Appeal Tribunal ruling is great news for litigation funders

5th November 2019

Simon Hough and Rebecca Wyke discover good news for litigation funders as they examine a recent Competition Appeal Tribunal ruling in relation to the funding of collective claims.

The case

UK Trucks Claim Limited v Fiat Chrysler Automobiles NV and Others; Road Haulage Association Ltd v MAN SE and Others [2019] CAT 26


In 2016, the European Commission imposed a €2.9billion fine upon 5 major truck manufacturers found to have broken EU competition rules by carrying out price fixing and operating a cartel over a period of 14 years between 1997 and 2011. In light of that finding, class actions have been brought in the UK on behalf of thousands of purchasers of trucks by UK Trucks Claim Ltd (“UKTC“) and the Road Haulage Association (“RHA“). Both claims are being funded by well-known third-party litigation funders: Calunius Capital for UKTC and Therium Capital for RHA under litigation funding agreements (“LFAs“).

In this case, the defendant truck manufacturers contended that the financial assistance provided by the litigation funders constituted “claims management services” as defined in s.4 CompA (and s.419A FSMA). Under the funding agreements, if the collective actions resulted in an award of damages then the payment to the funders would be determined by reference to the amount of damages recovered. Consequently, the manufacturers argued that the LFAs satisfied the definition of a damages based agreement (“DBA“) in s.58AA CLSA.

On its face, this was a simple and effective argument. The manufacturers maintained that the LFAs did not comply with the strict regulations that apply to DBAs and their formulation and that the LFAs were therefore unenforceable.

The Decision

The CAT commented that; “If the argument of the [manufacturers] is correct, the implications for litigation funding are stark. Third Party Funding is a well-recognised feature of modern litigation and facilitates access to justice for those who otherwise may be unable to afford it.

This was absolutely right and it was therefore necessary for the CAT to carry out a detailed and extensive exploration of the statutory framework to determine the true meaning of “claims management services” and whether the LFAs were caught.

The CAT decided that the statutory reference to “the provision of financial services or assistance” “in relation to the making of a claim” is to be interpreted as applying in the context of the management of a claim. Litigation funders are engaged in the funding of a claim, not the management of the making of a claim. On that basis, since litigation funders are not engaged in providing “claims management services”, funding agreements do not come within the statutory definition of a DBA in s.58AA(3) CLSA.


If the financial assistance provided under litigation funding agreements had been found to have constituted the provision of claims management services, every such agreement would be a DBA and very likely unenforceable. The Tribunal acknowledged that a decision in favour of the simple argument made by the truck manufacturers would have wide reaching consequences for the third party funding industry and was at pains to explore and explain the chronological development of the relevant legislation when arriving at its decision. There was certainly a policy consideration at play.

The Tribunal’s detailed and reasoned judgment will be very welcome news to those affected by the artificial prices they were forced to pay by the truck manufacturers as a result of their anti-competitive behaviour. It will also be music to the ears of the third party funding industry, who have avoided a raft of challenges to the enforceability of funding agreements and a potentially catastrophic blow to the way they do business.

Contact our experts for advice on litigation funding and commercial litigation matters.

This article has been co-written by Simon Hough and Rebecca Wyke.

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