UK Law and Practice Contributed by: Samantha Ward, Ben Jasper, Ryan Byrne and Chloe Lettington, Clifford Chance LLP
a tortious claim arising from anti-competitive conduct allegations under Section 9 of the Arbitration Act 1996 – an approach confirmed in Gazprom Export LLC v DDI Holdings Ltd (2020) EWHC 303 (Comm).
provided. Following PACCAR , arrangements where the funder’s return is a share of damages awarded must also comply with DBA requirements. Under the collective actions regime, the CAT has become increasingly willing to scrutinise the structure and adequacy of funding arrangements in place at the certification stage when assessing a class repre - sentative’s suitability (eg, in Consumers ’ Association ( Which ?) v Apple Inc & Ors (2026) CAT 29). Even once certified, the CAT has scrutinised funding arrange - ments (eg, in Boyle v Govia Thameslink Railway Ltd & Ors (2026),ordering proceedings decertified unless the claimant secured necessary funding (as well as replacing the deceased class representative). Distribution of funder returns from settlement pro - ceeds is also becoming a key CAT consideration, following the High Court’s judgment in R ( Innsworth Capital Ltd ) v Competition Appeal Tribunal (2026) EWHC 1393 (Admin) confirming it is within the CAT’s “wide powers” as a specialist tribunal to determine a just and reasonable return for funders. Insurance Legal expenses or after-the-event insurance is also available to cover costs. However, it is normally expensive. 11.2 Costs High Court Costs follow the event The general rule in the High Court is that costs fol - low the event – namely, that the unsuccessful party pays the reasonable costs of the successful party (CPR 44.2). The courts retain general discretion, hav - ing regard to all circumstances, including the parties’ conduct, partial success, and any payment into court or settlement offer drawn to the court’s attention. Even where a costs order is made, the successful party generally recovers only around two-thirds of its costs. Costs orders against third parties In exceptional cases, a successful party may seek a costs order against a third party – for example, if a third party has helped to fund litigation on behalf of the losing party. However, following Arkin v Borchard Lines Limited (2005) EWCA Civ 655 (“ Arkin ”), it is necessary
11. Funding and Costs 11.1 Litigation Funding Damages-Based Agreements
DBAs are available, under which lawyers can agree to accept a share of the client’s winnings, capped at 50% and on a no win no fee basis. DBAs are not avail - able in opt-out collective proceedings (as confirmed in PACCAR ). Litigation Funding Agreements As mentioned in 1.2 Recent Developments , follow- ing PACCAR , LFAs where the funder’s return is a share of damages awarded are now categorised as DBAs and unenforceable unless they meet applicable requirements (such as capping the funder’s share at 50% and being on a no win no fee basis). Most LFAs have been updated to work around this – for exam - ple, by recovering a multiple of the funds committed. The court of appeal in Sony Interactive Entertainment Europe Ltd v Alex Neill Class Representative Ltd and related appeals (2025) EWCA Civ 841 clarified that LFAs made after PACCAR where the funder’s return is calculated by reference to its outlay (notwithstanding that payout would come from proceeds) are not DBAs. Conditional Fee Arrangements (CFAs) CFAs, under which lawyers act on a “no win no fee” basis with a “success fee” uplift on success, are avail - able in England and Wales. They must be in writing, with an uplift capped at 100% of normal fees. The uplift is no longer recoverable from the losing party in most cases, save for CFAs entered into before 6 April 2016. Following PACCAR , CFAs where the funder’s return is a share of damages awarded must also com - ply with DBA requirements. Third-Party Funding Third-party funding by a professional litigation funder is also available in competition cases. The court of appeal has held that professional funders may be lia - ble for opposing parties’ costs, capped at the funding
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