CAT hits out at “unhelpful and misleading” Pogust Goodhead

The Competition Appeal Tribunal (CAT) has issued a stern rebuke to class action firm Pogust Goodhead, labelling its conduct as “unhelpful, uncooperative, deliberately obfuscatory and misleading” for failing to disclose critical litigation funding issues for three years. The ruling, in the case of *Sciallis v Fender & Ors* [2026] CAT 56, concerned proposed collective actions where the proposed class representative (PCR), Elisabetta Sciallis, represented by Pogust Goodhead, had failed to inform the Tribunal and defendants that negotiations with her initial funder, North Wall Capital, had collapsed. This lack of transparency led the CAT to order indemnity costs against the PCR from the point the funding negotiations ceased. The decision underscores the CAT’s stringent expectations regarding candour and continuous disclosure of funding arrangements in collective proceedings, highlighting the increasing scrutiny on litigation funding in the UK legal landscape.

The Competition Appeal Tribunal (CAT) recently delivered a significant judgment in *Sciallis v Fender & Ors* [2026] CAT 56, sharply criticising the conduct of prominent class action firm Pogust Goodhead. The Tribunal found the firm's actions to be “unhelpful, uncooperative, deliberately obfuscatory and misleading” due to its prolonged failure to disclose the breakdown of its client's litigation funding arrangements. This ruling has sent a clear message regarding the high standards of transparency expected from legal representatives in collective proceedings, particularly concerning the financial viability of such claims.

The case involved proposed collective actions brought by Elisabetta Sciallis, represented by Pogust Goodhead, against several musical instrument manufacturers. The core issue revolved around the firm's three-year delay in informing the CAT and the prospective defendants that a crucial litigation funding agreement had fallen through. This lack of candour ultimately led to the imposition of indemnity costs against the proposed class representative (PCR), marking a significant development in the CAT's approach to managing collective actions.

This article will delve into the specifics of the CAT's decision, examining the factual matrix, the Tribunal's reasoning, and the broader implications for law firms, litigation funders, and practitioners engaged in collective proceedings in the UK. The ruling not only highlights the CAT's commitment to procedural fairness and transparency but also intersects with the rapidly evolving regulatory environment for third-party litigation funding in England and Wales.

Collective proceedings before the Competition Appeal Tribunal are a unique mechanism designed to facilitate access to justice for large groups of claimants who have suffered harm due to competition law infringements. A critical aspect of these proceedings is the requirement for the CAT to be satisfied that the proposed class representative (PCR) has adequate financial resources to fund the litigation and to meet any adverse costs orders. This is enshrined in the Competition Appeal Tribunal Rules 2015, which require scrutiny of the PCR's funding arrangements.

While there is generally no blanket requirement to disclose litigation funding agreements (LFAs) in the Courts of England and Wales, collective actions represent a significant exception. In such cases, the CAT has consistently emphasised the importance of transparency regarding funding, particularly during the certification process and throughout the proceedings, to ensure the PCR can fairly and adequately represent the class. The Tribunal has the inherent power to order disclosure of the identity of a third-party funder and their contribution.

The landscape of litigation funding in the UK has also been significantly shaped by recent developments, notably the Supreme Court's decision in *R (PACCAR Inc and others) v Competition Appeal Tribunal and others* [2023] UKSC 28. This ruling classified LFAs where a funder's return was calculated as a percentage of damages as Damages-Based Agreements (DBAs), rendering many unenforceable if not compliant with the Damages-Based Agreements Regulations 2013. This has prompted a re-evaluation and restructuring of LFAs. Further, the Civil Justice Council (CJC) in June 2025 recommended a statutory regime for litigation funding, advocating for early disclosure of funding existence and funder identity, especially in collective proceedings. The Solicitors Regulation Authority (SRA) has also proposed new rules for law firms using third-party funding for consumer claims, mandating notification to the SRA and provision of a 'funding information document' to clients.

The CAT's judgment in *Sciallis v Fender & Ors* [2026] CAT 56 arose from proposed collective actions against musical instrument manufacturers, following Competition and Markets Authority findings of restricted retailer freedom to set prices online. The PCR, Elisabetta Sciallis, represented by Pogust Goodhead, initially indicated in March 2022 that she was finalising a litigation funding agreement with North Wall Capital. This agreement was expected to provide substantial cover, rising to £18 million.

However, negotiations between North Wall Capital and Pogust Goodhead ceased between January and March 2023. Crucially, neither the Tribunal nor the prospective defendants were informed of this material change. Instead, when a subsequent claim was filed in May 2023, Ms Sciallis's witness statement merely referred to “making arrangements for the provision of third-party funding,” omitting any reference to North Wall's withdrawal. The CAT found that Pogust Goodhead repeatedly refused to confirm the status of the funding arrangements in extensive correspondence with the defendants' solicitors. It was only a week before a scheduled case management conference in March 2026 that Pogust Goodhead finally confirmed that the agreement with North Wall had “never materialised” and that efforts to secure alternative funding had failed.

The Tribunal unequivocally rejected Pogust Goodhead's suggestion that the subtle change in language in the May 2023 witness statement was sufficient to convey the breakdown of funding. The CAT deemed the firm's responses “opaque and unclear,” concluding that they were “unhelpful, uncooperative, deliberately obfuscatory and misleading.” This conduct was found to be “unreasonable to a high degree and outside the norm of litigation practice,” constituting a breach of the PCR's general duties in conducting collective proceedings under Rule 4(7) of the Competition Appeal Tribunal Rules 2015, and a breach of the duty of full and frank disclosure.

As a direct consequence of this egregious lack of transparency, the CAT ordered Ms Sciallis to pay indemnity costs from April 2023, the point at which the funding negotiations with North Wall Capital had collapsed. The Tribunal summarily assessed costs for three defendants at £608,000 and ordered interim payments of £850,000 to the other two. This decision reinforces the CAT's consistent stance, as seen in cases like *Coll v Alphabet Inc. and Others* [2022] CAT 3, that funding arrangements are central to the authorisation condition for collective proceedings, and that PCRs and their legal representatives have a continuous duty of transparency.

The ruling further underscores the increasing pressure for greater transparency in litigation funding, particularly in the wake of the *PACCAR* decision and the ongoing legislative efforts to clarify the enforceability of LFAs. While the Litigation Funding Agreements (Enforceability) Bill 2024 aims to reverse *PACCAR*, and the CJC and SRA are proposing enhanced regulatory frameworks, the *Sciallis* judgment serves as a stark reminder that irrespective of the specific legal classification of LFAs, the fundamental duty of candour to the court and opposing parties regarding a claim's financial underpinning remains paramount in collective actions.

The Competition Appeal Tribunal's robust judgment in *Sciallis v Fender & Ors* [2026] CAT 56 serves as a critical reminder to practitioners of the paramount importance of transparency and candour, particularly concerning litigation funding in collective proceedings. The CAT's unequivocal condemnation of Pogust Goodhead's conduct and the subsequent order for indemnity costs highlight that obfuscation regarding a claim's financial viability will not be tolerated. This decision reinforces the Tribunal's role in ensuring that proposed class representatives and their legal teams maintain the highest standards of disclosure throughout the litigation lifecycle.

For practising attorneys and legal professionals, the implications are clear: a heightened duty of continuous disclosure exists for all material changes to funding arrangements in collective actions. Failure to proactively inform the Tribunal and opposing parties of such changes can lead to severe adverse costs orders and reputational damage. Practitioners must remain vigilant and abreast of the evolving regulatory landscape, including the recommendations from the Civil Justice Council and the proposed SRA rules, which signal a broader trend towards increased scrutiny and formalisation of litigation funding disclosure requirements. Proactive and transparent communication, rather than reactive and evasive responses, is now more critical than ever to navigate the complexities of collective proceedings successfully and ethically.