Study for the European Commission on Mapping Third Party Litigation Funding in the European Union
On 13 September 2022, the European Parliament adopted a resolution on responsible private funding of litigation which called the Commission to propose legislation that would regulate TPLF in the EU. The Commission, in its response to the resolution, committed to carry out a mapping study that would take stock of the situation in the EU. The British Institute of International and Comparative Law (BIICL) and Civic Consulting, supported by experts from the Asser Institute and from Risk & Policy Analysts (RPA), carried out the study on Mapping Third Party Litigation Funding in the European Union. The study maps legislation, practice, and debate on TPLF in the Member States and four non-EU countries (United Kingdom, Switzerland, United States, and Canada).
The study is structured around:
A legal analysis based on desk research and national reports: the national experts conducted intensive desk research on the relevant existing and planned legislation applicable to TPLF in their jurisdiction, covering a broad range of aspects connected with TPLF. The results of the national legal research, along with the results of the broad desk research, have been analysed and synthesised to present the salient features, similarities, and differences of TPLF regulation across the selected jurisdictions, as well as the main issues identified. Particular focus was also placed on two areas of interest: assignment of claims, and financial regulation / investment funds. The legal analysis also includes a comparative table presenting the degree of compatibility of the national TPLF regulations (if existing) with the solutions proposed by the draft directive annexed to the EP resolution, including an assessment of the need for and the value added of the proposed solutions.
A broad consultation of stakeholders which presents and analyses opinions of key stakeholders on the regulation and practical operation of TPLF in their jurisdictions and on the needs regarding regulation of TPLF both at the national and at the Union level. All stakeholder groups were covered by the consultation: litigation funders, lawyers/law firms, businesses (other than law firm and litigation funder), consumer organisations and other representatives of consumer/citizen interests, public authorities, judiciary, arbitrators/mediators, academics/researchers (in all cases also including the representative organisations of these stakeholders). In total, 84 national interviews were documented in an e-questionnaire. In addition, 147 stakeholder organisations and individuals completed the (largely identical) EU stakeholder survey, the invitation to which was widely distributed across relevant stakeholders across the EU. Overall, this amounted to 231 contributions, which covered all EU countries, as well as several third countries. The consultation was accompanied by an EU level interview process, which ran in parallel to the EU stakeholder survey, and focused on selected key stakeholders that elaborated on their survey contribution.
In light of the results and data gathered in the legal research and the consultation, three different approaches are considered in the study, along with their rationale: no regulation, light-touch regulation, and strict regulation. The results of the study will be used by the Commission's services to assess the appropriate follow-up to the European Parliament resolution on responsible funding of litigation.
Authors :
- Prof Eva Lein, BIICL/UNIL (study lead, legal analysis)
- Constance Bonzé, BIICL (legal analysis and coordination of national experts)
- Rhonson Salim, BIICL/Aston University (legal analysis)
- Dr Frank Alleweldt, Civic Consulting (co-lead, EU consultation component)
- Dr Senda Kara, Civic Consulting (EU consultation component)
