Litigation funding is booming. The number of lawsuits and arbitrations financed or acquired by litigation funds is increasing to such an extent that, in some jurisdictions, litigation funding is becoming established as an essential tool for complex judicial or arbitration proceedings because of the benefits it brings.
And litigation funding is certainly here to stay. Proof of this is the recent establishment of the first International Legal Finance Association or “ILFA”.
ILFA is a non-profit association based in Washington DC and with a strong presence in London, whose mission is to become the global voice of the commercial legal finance industry, representing litigation funders in their dealings with governments, regulators, international associations, as well as professional legal bodies. It also intends to act as a clearing house for research, analysis and data concerning the industry.
Although it already has predecessors, such as the Association of Litigation Funds of England and Wales (“ALF”), ILFA is particularly relevant as it is the first international association founded by six of the major litigation funds operating worldwide.
Litigation funding, in its short life, has been criticised by some sectors who consider it necessary to regulate the activity since it “favours” the filing of frivolous claims and generates conflicts of interest with litigants.
However, the establishment of associations such as ILFA shows the commitment and willingness of actors in the litigation funding industry to promote good practices in the market and self-imposed regulation in order to always act with the utmost rigour.
Litigation funds are a good partner for litigants and law firms, allowing access to justice for actions with a fair cause of action and helping to minimise the opportunity costs linked to litigation assets.
From PLA we consider the establishment of associations that promote good practices in the litigation finance sector to be very positive and we work daily to always act with the highest ethical and professional standards.
Silvia Ochoa Legal Senior Analyst