ABSTRACT
Third-party litigation funding (TPLF) has been one of the ‘hot potatoes’ in European civil justice in recent years. While funding of litigation by commercial parties is not a new phenomenon and has found its way to commercial arbitration and different types of commercial or non-commercial court litigation, its use has expanded in Europe. Litigation is notoriously expensive, while public funding is often limited or may not be available at all. This paper discusses the role of commercial funders in light of the development and regulation of TPLF in Europe, in particular in collective actions and strategic litigation drawing on EU and national legislation, case law, literature, and interview findings. It concludes that TPLF play an important role in securing access to justice. The overall positive assessment of the role of commercial litigation funders does not imply that monitoring the growth of the litigation finance market and maintaining oversight over TPLF is unnecessary. For the sake of transparency, ensuring procedural autonomy, and avoiding conflicts of interest, TPLF agreements must meet specific requirements and, where appropriate, be subject to judicial oversight. However, overly strict regulation and rigid caps on funders’ fees will stifle the development of the TPLF market, raise transaction costs, and hinder the evolution of the European collective action system, especially for high-risk cases that are essential for the development of the law to reach the court.
Dori, Adriani and Kramer, Xandra E, Financing Collective Actions and Strategic Litigation in Europe: The Role of Third-Party Funders in the Shadow of the Procedure (September 27, 2024) in A Uzelac and S Voet, The Heroes of the Judicial Periphery: Court Experts, Court Clerks, and Other Actors in the Shadows, Bloomsbury 2025, pp 331-363.
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