Litigation financing in Brazil: an expanding tool in the largest economy in the region
Third-party litigation funding has become a strategic tool in multiple jurisdictions, and Brazil—the largest economy in Latin America and one of the countries with the highest volume of litigation in the world—is no exception. Faced with a complex judicial system and lengthy processes, the third-party funding model offers a powerful alternative for companies, individuals, and law firms seeking financial support to enforce their rights. Loopa, as a specialized fund, is driving this transformation by providing capital, experience, and vision to a market with high potential.
History of third party funding in Brazil
The development of third party funding in Brazil is relatively recent but has shown sustained growth in the last decade. Initially driven by the rise of international arbitration and the interest of foreign investors, the model began to gain ground in the local context, especially in large commercial disputes, contractual disputes, and bankruptcy proceedings. In a country with over 70 million active cases in the judiciary, external financing represents a logical way to alleviate the financial burden of those facing lengthy and costly processes. The first operations were concentrated in São Paulo and Rio de Janeiro, where the country's main law firms operate, but interest in the model has expanded to other regions and types of claims. Today, Brazil has several institutional actors offering litigation funding, both local and international, and the topic has been the subject of attention from academics, regulators, and courts, consolidating its legitimacy within the system.
Legal framework: contractual autonomy and compatibility with Brazilian law
Brazil is governed by a civil law system, based on the Federal Constitution, the Civil Code, and the Code of Civil Procedure. There is no specific law regulating third party funding, but there are also no rules prohibiting it. Financing agreements are understood as private agreements between parties, protected by the principle of autonomy of will. The assignment of litigious rights is allowed under Brazilian law, provided that certain formal requirements are met. In addition, the figure of quota litis —whereby a lawyer agrees to collect fees only if the case is successful— is expressly provided for and accepted, especially in the civil and labor law fields. This practice supports the very foundation of litigation funding: assuming risks in exchange for a portion of the economic outcome. In this context, Loopa can structure its operations in Brazil with legal certainty, acting in harmony with the general principles of Brazilian law and always respecting the independence of the lawyer and the rights of the client.
Arbitration Application: Brazil as a Regional Reference
Brazil has a dynamic and internationally recognized arbitral ecosystem. Institutions such as the Market Arbitration Chamber (CAM), the Mediation and Arbitration Chamber of FIESP, and the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (CAM-CCBC) attract high complexity cases, both domestic and international. These institutions not only accept the participation of third-party funders but have also begun to incorporate transparency obligations and disclosure of the existence of funding in their regulations. This reinforces the legitimacy of the model within Brazilian arbitration and aligns it with international best practices. In this context, Loopa can intervene as a funder in complex arbitrations, offering parties a way to address costly expert opinions, lengthy hearings, and specialized legal representation without compromising their liquidity. Arbitration in Brazil is also usually faster than state justice, making funding an even more effective tool to maximize the chance of success.
Application in judicial disputes: a response to lengthy and costly processes
The Brazilian judicial system, while it has advanced in digitization and access, continues to face major challenges in terms of duration and procedural complexity. High-value lawsuits can take years, even decades, to be definitively resolved. This reality particularly affects companies with assets frozen in litigation or individuals in need of immediate liquidity. In this scenario, the financing offered by Loopa allows for the transformation of rights into concrete assets. Through litigation monetization, clients can receive an advance on the value of their claim, without having to wait for the final judgment. This approach is particularly useful in litigation against the State, civil executions, civil liability actions, and collective processes. Furthermore, the financing helps improve procedural strategy by covering expenses for experts, audits, appeals, and robust legal representation, thereby increasing the likelihood of a favorable resolution. In many cases, it also strengthens the negotiating position against the counterparty, who recognizes the seriousness and support of the funder.
Conclusion: transforming disputes into opportunities in Brazil
Brazil brings together all the conditions for sustained growth of third party funding: an active economy, a sophisticated legal culture, an overloaded judiciary, and a legal community seeking innovation. Litigation financing is presented as a legitimate, useful, and expanding tool, aligned with Brazilian legal principles and the needs of those facing prolonged and costly litigation. Loopa, as the successor to Qanlex's pioneering experience, arrives in Brazil to offer a concrete alternative: providing capital, speeding up processes, reducing risks, and allowing the best cases to move forward without economic obstacles. From São Paulo to Porto Alegre, from arbitration to the Supreme Court, Loopa supports lawyers and clients in the pursuit of justice. Because in a country with millions of active cases, every meritorious claim deserves a real opportunity.
