The discussion surrounding third-party litigation funding (TPLF) continues to evolve globally, with Europe and the U.S. approaching the topic from distinct yet intersecting perspectives. Recent panels hosted by NYU's Center on Civil Justice and the European Law Institute shed light on these convergences, particularly on the critical issue of transparency in litigation funding.
In Europe, the European Law Institute's recent report on TPLF principles emphasizes the need for transparency while protecting key interests. The report suggests disclosing the identity of funders and their involvement in a case, stopping short of recommending full disclosure of funding agreements. European legal experts argue this strikes a balance, promoting accountability without jeopardizing confidentiality.
This approach resonates with ongoing discussions in the U.S., where proponents like the U.S. Chamber of Commerce argue for stricter disclosure requirements to eliminate secrecy and ensure ethical practices. Critics of TPLF in the U.S. claim that without transparency, funders may exert undue influence or raise concerns about foreign investments in legal cases.
Supporters of litigation funding highlight its role in leveling the playing field, enabling parties with limited resources to pursue legitimate claims. As NYU Professor Franco Ferrari pointed out, TPLF often allows individuals and organizations to address disputes they might otherwise abandon due to financial constraints.
However, regulatory frameworks remain a sticking point. U.S. stakeholders often view TPLF through the lens of potential conflicts of interest and national security risks, such as concerns about foreign entities using litigation funding for ulterior motives. Meanwhile, European efforts aim to create a flexible, globally resonant framework, balancing access to justice with appropriate safeguards.
As litigation funding continues to grow globally, dialogue between European and U.S. stakeholders is essential to shape effective regulation. By focusing on common principles such as transparency and ethical practices, both regions can foster a funding landscape that benefits plaintiffs, defendants, and the justice system.
This ongoing discourse highlights the importance of cooperation and shared learnings, ensuring that TPLF evolves responsibly and equitably across jurisdictions.