Access to Justice: Litigation Financing and the New Developments

Abstract

Litigation financing is also known as legal financing and third-party funding is relatively recent development beginning on or around 1997. The demand for both commercial and consumer litigation funding is picking up the pace. Nevertheless, the landscape for commercial litigation is rapidly evolving and has the capacity to protect the plaintiff from a potential nightmare of litigation, financial fines, and bad publicity. Litigation Financing is favourably viewed as a means of increasing access to the civil justice system and spurring the development of the rule of the law. The funding corresponds to an increase in litigation and court caseloads. It develops a principal-agent framework where litigation funders provide funding which will increase the market for legal services. Litigation financing typically authorizes the third party by a treaty as how a dispute shall be settled. Each funding transaction is unique and it is tailored to individual requirements, structure and jurisdiction. The funder facilitates financing and controlling the litigation in the expectation to earn a profit. Market-based approach to justice is gaining momentum and surging in many countries around the world.

Keywords: Third-party financing; Access to justice, market for justice, alternative litigation funding, legal financing