28 Jun LITIGATION FUNDING

The Royal and Illustrious Bar Association of Zaragoza hosted last June 21 and 22 the IV Congress of the Aragonese Lawyer, organized by the Council of Bar Associations of Aragon. A meeting in which Navarro Llima Abogados was present and where we were able to access the latest news in many areas of the legal sector.

Among others, we had the honor of attending a session on “litigation funds” that was the responsibility of both the Dean of the Illustrious Bar Association of Jerez de la Frontera, Mr. Marcos Camacho, and the young entrepreneur Mr. Ángel Guirao, Madrilenian lawyer expert in the subject. The session was presented and moderated by Mr. Antonio Morán, Dean of the Royal and Illustrious Bar Association of Zaragoza.

The litigation funds are responsible for the financing of litigation for plaintiffs in litigation and arbitration. A practice that is already common in countries such as the United States or the United Kingdom and that is beginning to arrive strongly in southern Europe and, specifically, in Spain.

The growth of litigation funding is one of the major trends in international litigation and another example of how the legal sector is changing in the rest of the foreign legal system, which is already having a very significant impact in the area of litigation in Spain. As has been stated in the specialized press over the last few years, in Spain this is due to the fact that the country offers a perfect panorama for the financing of litigation: “A high level of inequality and an increasing legal security on the part of the courts, courts and arbitration courts. ”

The method of arbitration funds consists of financing the costs of the potential plaintiff (lawyer, attorney, expert, etc.) and also the costs in case of losing. If the lawsuit or arbitration is successful, the financing litigation fund would receive a percentage of the amount claimed that today in practice is between 15 and 50%, or a multiple of the investment. In case of defeat in the trial or arbitration, the funding fund lost all its investment. That is why, he explained, the selection of clients plays a very important role, due diligence at the beginning of the process and in the first interviews between the litigation fund and the client.

The truth is that the litigation financing industry is becoming a new player in the market and, also, a partner of our clients and legal firms when it comes to working on our lawsuits.
In Spain, there is no specific regulation, apart from art. 1.255 of the Civil Code or similarly articles 239 to 249 of the Commercial Code. They represent a great opportunity for clients to face litigation more easily when they do not have as much financial muscle and for the professional sector of the legal profession not only constitutes an opportunity but also a challenge to provide solutions and value to clients. We can not lose sight of the fact that the financial industry is the engine of the economy and of many businesses and that, without a doubt, this new concept of financing possible litigation will be decisive for the evolution of the legal sector in Spain, just as it is already It has happened in other countries such as the United States, the United Kingdom, France or Germany.

Inés Usón

Lawyer