The European Parliament has approved a set of recommendations to the Commission on Responsible private funding of litigation. The Resolution, dated 13 September 2022, recognizes that litigation funding is a growing practice in the EU and calls for a proposal for a Directive to establish common minimum standards on third-party commercial litigation funding addressing the transparency, fairness and proportionality of this tool.
At Stonward, we already addressed some of the European Parliament’s concerns and some of the issues raised in the resolution. During the second International Congress on Litigation Funding (LF), organized by Stonward and the Peruvian Institute of Arbitration, several experts on Litigation Funding explained that the legislation being proposed by bodies such as the EU is prone to “over-regulation”.
For them, the reasons for this severe regulation are a mix of: a lack of real knowledge of how this legal tool works, a misconception and sometimes negative idea about the investment funds behind it, and some lack of transparency.
Read the resolution here and the conclussions of the second International Congress on Litigation Funding (LF) that took place in February here.