Apple v Gutmann No. 2 (UKSC/2025/0159) and Visa appeal (pending)

This appeal to the Supreme Court challenges the Court of Appeal’s landmark decision in Sony v Alex Neill Class Representative Ltd [2025] EWCA Civ 841, in which Lord Justice Flaux held that litigation funding agreements calculating the funder’s return as a multiple of capital committed are not damages-based agreements, even where they include a cap by reference to total damages. The appeal will require the Supreme Court to revisit and potentially clarify or overrule its own decision in PACCAR, which triggered the restructuring of LFAs across the market. The central legal question is whether the phrase “payment determined by reference to the amount of damages” in section 58AA of the Courts and Legal Services Act 1990 captures multiplier-based funding structures. The appellants argue that it does, submitting that any agreement under which the funder’s return is contingent on and paid from damages is “determined by reference to” those damages regardless of the calculation mechanism. The respondents maintain the Court of Appeal’s distinction between the basis of calculation and the source of payment.

The appeal is of market-wide significance. Since PACCAR, the overwhelming majority of active litigation funders have restructured their LFAs to adopt multiplier-based return mechanisms. The Supreme Court’s decision will determine the enforceability of thousands of restructured agreements across the litigation funding market. An adverse ruling could plunge the market back into the crisis of uncertainty that followed PACCAR, potentially requiring a second wave of restructuring or legislative intervention. The appeal is being heard alongside related questions arising from the Visa proceedings, which raise similar issues in the interchange fee context. The government’s announced intention to legislate to reverse PACCAR may also be relevant, although the timing of legislation remains uncertain. The Supreme Court’s decision will be the defining judgment on litigation funding enforceability since PACCAR itself and will shape the regulatory and commercial landscape for years to come.