Panel discussions held during London International Disputes Week 2025 revealed a litigation funding marketplace grappling with potentially changing regulatory frameworks whilst still uncovering enforcement and arbitration opportunities across emerging markets. Below, Oliver Radway, Senior Enforcement Associate at Deminor, reflects on the week from an enforcement and asset recovery perspective, while also paying attention to the implications of recent policymaking on third-party funding as a whole.
Panel on Funding and Enforcement
One of the key panel discussions from a third-party funding perspective centred on the Civil Justice Council's final report on the regulation of litigation funding. The report was co-authored by Nicholas Bacon KC, who expressed cautious optimism about achieving greater clarity in funding arrangements in the UK. One litigation funder highlighted concerns that:
"increasing regulation and caps on returns were putting a chokehold on the flexibility of funders to fund more proceedings in the UK," amid the ongoing fallout from PACCAR.
The Civil Justice Council’s report aims to redress the balance between protecting unsophisticated consumers while ensuring that funders are not squeezed out of legitimate opportunities in the UK through excessive regulation. It comes at a critical juncture, when litigation funding had begun to mature from niche financing to mainstream legal and financial strategy. The emphasis on consumer protection, whilst necessary, could create implementation challenges for cases between sophisticated parties, as well as commercial arbitration funding. However, Nicholas Bacon KC's observations about protecting consumers from "unfair terms in litigation funding agreements" underscored the sector's evolution towards institutional-grade transparency standards.
The Competition Appeal Tribunal claims framework received particular attention in this panel discussion, with practitioners noting the opt-in/opt-out mechanisms' impact on funding structures. However, the regulatory discourse revealed a gap: whilst consumer protection dominated discussions, pure business-to-business enforcement scenarios—representing significant market volume—received less attention. The brief comments that were made, though, indicated that the UK remains an attractive jurisdiction for enforcement despite PACCAR – especially when enforcing foreign judgments against debtors with assets located in the country.
Enforcing Against States: Perspectives from around the World
The enforcement of arbitral awards against state entities emerged as a high-growth opportunity in this panel discussion, despite the inherent complexities around sovereign immunity. Litigious sovereign debtors in particular, including the likes of Russia and Venezuela, have grown wise to sophisticated enforcement techniques. Enforcement strategies, therefore, increasingly depend on advanced asset identification capabilities and a firm understanding of jurisdictional nuances across legal systems to bring sovereign debtors to the negotiating table.
The Iraqi SOMO case study continues to illustrate both the challenges and opportunities in sovereign enforcement. Despite generating around 90 per cent of the national budget, the State Organisation for Marketing of Oil, also known as SOMO, was deemed by the English Commercial Court to maintain separate legal personality from the Iraqi state, rendering traditional enforcement mechanisms ineffective. Such complexities highlight the value of specialised enforcement expertise and thorough due diligence processes when assessing sovereign disputes from a funding perspective.
Practitioners also noted that most assets owned by sovereign states are considered to benefit from sovereign immunity, emphasising the critical importance of identifying commercially-focused enforcement targets. This constraint continues to create strategic advantages for funders who can support fatiguing clients with advanced asset investigation capabilities and global source networks.
The Global Freeze: Strategic use of Mareva Injunctions in Cross-Border Asset Recovery
The strategic deployment of Mareva injunctions has evolved into a sophisticated pressure mechanism beyond traditional asset preservation. Practitioners in this panel, which included investigators and litigators alike, rightly described such injunctions as the “nuclear option,” and while obtaining one is not easy (nor cheap), everyone acknowledged their transformative effect when implemented properly.
A recent case involving a UAE debtor and an art gallery managed by his daughter demonstrated innovative enforcement approaches, where freezing orders created reputational and operational pressures beyond pure financial constraints. The debtor's daughter could no longer operate the gallery following a successful injunction application, with authorities physically securing the premises and displaying public notices. This caused significant embarrassment to the family and ultimately forced the debtor into early settlement discussions.
This case illustrates how modern enforcement strategies can leverage social and commercial pressures alongside legal mechanisms to bring about successful resolutions to disputes. In other words, creditors can be rewarded for implementing creative strategies that focus on thinking outside the traditional asset recovery toolbox. Further, it suggests that successful enforcement increasingly requires understanding cultural contexts and relationship dynamics within target jurisdictions.
Diverging Sanctions Policies: Navigating Enforcement, Circumvention and the Litigation Surge
Multilateral sanctions regimes continue to expand in scope and complexity, creating both compliance challenges and market opportunities. OFAC, United Nations, and other sanctions regimes maintain "laws and regulations around the assets that can and can't be subject to enforcement measures,” according to Maya Lester KC of Brick Court Chambers.
The debate surrounding Libyan frozen assets highlighted the evolving relationship between creditor rights and sovereign reconstruction obligations. Some audience members argued that creditors took significant risks by doing business in countries like Libya and therefore should not benefit from repatriated assets intended for national rebuilding efforts. However, the UN’s recent decision to ease sanctions restrictions on Libya and specifically to unfreeze funds held by the sanctioned Libyan Investment Authority’s funds in Belgium, indicate that creditors may benefit from a wider pool of assets that are amenable to enforcement. That said, when assessing these opportunities, it is essential that enforcement practitioners focus on unsanctioned, commercial assets instead of relying too heavily on the actions of multilateral sanctions regimes, which are often unpredictable, fast-moving and politically driven.
This regulatory complexity creates competitive advantages for funders with sophisticated compliance frameworks and dedicated sanctions expertise. As international disputes increasingly involve sanctioned jurisdictions or entities, compliance capabilities become essential competitive differentiators rather than mere operational requirements.
Key Takeaways: Market Outlook and Strategic Implications
Despite Brexit and PACCAR uncertainties, London's position as an international disputes hub remains robust, with practitioners noting steadfast international confidence in UK legal and jurisdictional capabilities. With this in mind, there were several take away points for funders and enforcement professionals to consider.
Enforcement Sophistication Increases Success Rates
Modern enforcement strategies increasingly combine legal mechanisms with reputational and operational pressures. The most successful practitioners have developed a comprehensive understanding of cultural contexts, relationship dynamics, and alternative pressure points beyond traditional legal asset recovery techniques. These can be particularly effective when enforcing against high-net-worth individuals, who often seek to prioritise their reputation ahead of the lucrative assets they own.
Regulatory Clarity Drives Market Consolidation
Litigation funding regulation in the UK continues to develop and mature. Recent signs have emerged suggesting that the impact of PACCAR will be mitigated and possibly reversed by potential upcoming law changes. If amended and ultimately ratified, these will likely result in an uptick in third-party funding cases in the UK, which will inevitably lead to a greater number of enforcement and asset recovery opportunities.
Strategic Positioning for 2025-2026
The global litigation funding landscape continues to evolve towards institutional sophistication whilst expanding into previously inaccessible markets. Successful funders will continue to distinguish themselves through specialised enforcement capabilities, comprehensive sanctions compliance, and strategic positioning within emerging market ecosystems. While the true impact of AI remains to be seen, leveraging it may present new funding opportunities in emerging markets that have traditionally been weighed down by unreliable court systems and excessive bureaucracy.
Written by:
Oliver Radway
Senior Enforcement Associate
