Litigation Insurance & Funding: Three UK Market Predictions for 2026

As economic pressure, procedural reform and political scrutiny continue to shape the UK litigation landscape, 2026 is set to be a defining year for both litigation insurance and third-party funding. Costs remain high, defendant strategies continue to harden, and claimants are being forced to think more creatively about risk allocation and capital deployment.

Against that backdrop, these are the trends we predict for 2026:

Own-Side Cost Insurance Will Move into the Mainstream

For many years, the UK litigation insurance conversation has been dominated by ATE insurance for adverse costs. While own-side cost insurance has existed for some time, it has often been viewed as a specialist or situational product rather than a core part of most case strategies -- that is now changing.

With hourly rates continuing to rise, pressure on WIP intensifying, and clients increasingly intolerant of runaway cost exposure, we expect own-side fee insurance to move decisively into the mainstream during 2026. It is no longer being used solely as an emergency solution. Instead, it is increasingly built in at the outset for self-funded claimants pursuing corporate and commercial disputes.

With increasing flexibility in premium structures (including contingent premiums) and indemnities available in the tens of millions of pounds, a self-funding claimant has few reasons to overlook this type of coverage. Knowing that an insurer will reimburse the company’s external legal spend if the case is unsuccessful (or unenforceable) is a tool that general counsel and financial controllers should not ignore when committing to a substantial dispute budget.

Crucially, own-side cover is no longer just about protection. It is becoming a tool for budget certainty, cashflow management and portfolio risk control.

Likewise, we expect the use of CFA and DBA insurance to steadily increase as law firms seek to compete on cost certainty for clients without bearing the entire burden or risk themselves. These types of insurance work particularly well for firms aiming to grow without over-exposing their balance sheet or diluting returns through a full third-party funding arrangement.

Large Indemnity ATE for CAT & Group Claims Will Increase

Following recent CAT and CJC-related developments, we are already seeing a shift in how the market views competition and large-scale claimant litigation more broadly. In 2026, we expect a clear increase in the use of large-limit ATE placements for CAT proceedings, follow-on damages claims and other complex group actions.

These cases bring long duration exposure, appeal-heavy risk profiles and very high adverse costs volatility. As a result, we are seeing more layered insurance structures, greater underwriting scrutiny and more sophisticated approaches to risk modelling and attribution.

Capacity remains available, but it is increasingly selective. The ability to access and structure meaningful seven- and eight-figure ATE programmes will become a genuine differentiator between claimant teams as collective actions continue to grow in scale and complexity.

Political and Regulatory Activity Will Continue to Distort the Market

Litigation funding and insurance remain firmly in the political spotlight. From the ongoing consequences of PACCAR to the evolving treatment of DBAs and LFAs, political risk is now a permanent feature of the UK funding and insurance landscape.

In 2026, we expect further regulatory uncertainty around funding structures and continued pressure on costs recovery. At the same time, increasing “social inflation” led arguments continue to create turbulence in the insurance market.   The practical consequence is that certain types of risk may periodically become harder to insure, pricing may shift quickly in specific sectors, and some carriers may reduce participation without much notice – as was the case in 2025.

In this environment, flexibility is essential. Firms should be wary of relying too heavily on any single insurer, as 2025 has demonstrated how quickly conditions can change. To that end, we strongly recommend broker-led access (whether through TheJudge or otherwise) to ensure you can secure the best available capacity when you need it.

What This Means in Practice — and How We Help

The most successful teams will be those that think about insurance early, structure it intelligently alongside funding where appropriate, and retain the flexibility to adapt as political, judicial and carrier appetite shifts.

As the market continues to evolve, having the right protection (and the right partners) will be more important than ever. 

One other shameless prediction....

 Following our 25th anniversary year, TheJudge will enter its next quarter-century as it concluded the last: being responsive, creative, and committed to delivering a first-class service.