No EU legislation on third-party litigation funding
European Commissioner for Justice Michael McGrath closed the final meeting of the EU’s High-Level Forum on Justice for Growth with a clear statement that the commission does not plan new legislation on third-party litigation funding (TPLF).
He added (18 November) that forum participants also indicated that there was no need to further regulate third-party litigation funding.
Implementation
Instead, Commissioner McGrath said that the EU body would prioritise monitoring the implementation of the Representative Actions Directive (RAD) over any new legislative proposals.
Paul Kong (executive director of International Legal Finance Association (ILFA) said: “We’re delighted to see Commissioner McGrath’s clear statement that EU regulation for third-party litigation funding is not planned.
“This appears to close any talk of the need for new regulation, which was completely without evidence and created considerable uncertainty for the sector.
“Over several years, ILFA has consistently made the case that litigation funding plays a critical role in ensuring European businesses and consumers can access justice without financial limitations and are not disadvantaged against larger and financially stronger defendants.
“New legislation would have choked off the availability of financial support to level the playing field for claimants,” he stated.
Ann McGarry, chair of the Law Society Litigation Committee (pictured), commented: “Ireland is currently an outlier in Europe when it comes to third-party litigation funding."
Narrow exception
“Apart from a narrow exception for international arbitration, it remains prohibited under Irish law,” she said.
“The Law Society Litigation Committee supports a carefully regulated approach that balances the relevant interests appropriately.
“While the European Commission is moving toward harmonised rules to improve transparency and consumer protection, any change here will depend on domestic legislation following the Law Reform Commission’s forthcoming report.
“For now, third-party funding is not permitted in Irish civil litigation,” Ann McGarry explained.