Litigation financing in Colombia: a key tool for access to justice
Litigation financing, also known as third party funding (TPF), has gained ground in Colombia as a strategic option to facilitate access to justice. This financing model allows individuals or companies facing high litigation costs to obtain the necessary capital to continue their lawsuits, without having to assume the economic risk entirely. Through specialized funds like Loopa, plaintiffs can have the necessary support to bring their cases to a successful conclusion, without the economic factor being an obstacle to seeking justice.
History of third party funding in Colombia: the arrival of Loopa as a pioneering fund
The concept of third party funding began to gain relevance in Colombia in the last decade, when the need for financing solutions for complex litigation became more evident. Loopa, formerly known as Qanlex, was one of the first funds in Colombia to adopt this financing model, marking the beginning of a new era in access to justice. The company stood out for being a pioneer in offering funding alternatives for litigation that otherwise might have been out of reach for claimants due to the costs involved. Since its arrival in the country, Loopa has worked to open doors for litigants who did not have the necessary resources to cover the costs of a legal process, especially in large-scale disputes. Thanks to the flexibility and adaptability of the financing model, many individuals and companies have been able to finance their cases without losing control over their rights or the outcome of their claims.
The legal framework for PFI in Colombia: a private agreement within continental law
Colombia, like other countries in the region, follows the legal system of continental law, where agreements between parties are governed by principles of autonomy and contractual freedom. Third party funding in Colombia adheres to these principles, as financing agreements are privately entered into between the claimant and the funder, without the need for direct state intervention or regulation, as long as it does not contravene public policy provisions. The financing model in Colombia is similar to that of other countries with continental law, such as Spain or Argentina, where the assignment of litigation rights is recognized and regulated within the legal framework. In this case, the funder may acquire rights to the economic benefits derived from litigation, in exchange for assuming the costs thereof. This type of agreement is comparable to the practice of contingency fees, where lawyers assume the economic risk in exchange for a portion of the economic outcome of the litigation. The difference lies in that litigation financing is a form of investment, with the financier assuming the risk and obtaining a return in exchange.
The application of the FIDIC contract in arbitration: the main arbitration centers in Colombia
Arbitration in Colombia is an increasingly used mechanism to resolve commercial and contractual disputes. Law 1563 of 2012, which regulates arbitration in Colombia, establishes a favorable legal framework for dispute resolution through this method, and several arbitration centers such as the Bogotá Chamber of Commerce (CCB), the Arbitration and Conciliation Center of the Medellín Chamber of Commerce, and the Arbitration and Conciliation Center of the Cali Chamber of Commerce have emerged as key players in the administration of arbitration processes. Third-party funding has become a strategic option for those involved in large-scale arbitration disputes, as it allows parties to finance the costs associated with arbitration proceedings without hindering progress in the case. Loopa, with its experience in international arbitrations, has worked with lawyers and claimants in Colombia to ensure success in these processes, easing the financial burden on litigants while maintaining control of the legal strategy in the hands of lawyers.
The TPF in judicial disputes: a solution to the duration and costs of cases
In Colombia, judicial disputes, especially those involving large commercial claims, labor conflicts, or disputes against the State, tend to drag on for long periods of time. The costs of litigation, combined with judicial congestion, create a challenging environment for those seeking justice but lacking the necessary financial resources to cover the expenses of a process that can last several years. This is where litigation funding becomes particularly relevant. Loopa provides financing solutions that allow plaintiffs to pursue their claims without the immediate concern of process costs. This is especially important in cases against the State, where the duration and complexity of the litigation can result in a significant financial burden for the plaintiffs. By offering capital to fund litigation expenses, Loopa ensures that litigants are not pressured to abandon their cases due to lack of resources, enabling them to seek justice regardless of the process duration.
Conclusion: the future of litigation financing in Colombia
Litigation funding in Colombia is proving to be a powerful tool to improve access to justice. As more individuals and companies understand the advantages of this model, the demand for third party funding like Loopa continues to grow. The Colombian legal framework, based on principles of continental law, has allowed this financing model to develop effectively, ensuring that parties can agree on terms privately without compromising their rights. The future of litigation funding in Colombia is promising. With increasing acceptance and a strong legal foundation, the model will continue to expand opportunities for access to justice for those who lack the resources to face costly litigation, whether in national courts or international arbitrations. Loopa, as a pioneering fund in the country, is well positioned to continue leading this change and providing financing solutions to those seeking justice without being limited by their economic capacity.
