Litigation financing in Costa Rica: promoting access to justice
Litigation financing, or third party funding (TPF), is an increasingly recognized tool in Costa Rica as an effective way to improve access to justice. This model allows individuals and companies to obtain the necessary financial support to address the costs of litigation, especially in complex or high-value cases, without having to assume the full economic risk. Through specialized funds like Loopa, plaintiffs can continue with their legal cases without being limited by their resources, allowing them to focus on seeking a fair resolution. This model is transforming the country's legal landscape, enabling more people to bring their claims to court without relying solely on their economic capacity. In this way, litigation financing is presented as a comprehensive solution to ensure that legal disputes are resolved equitably, regardless of the litigants' financial situation.
History of third party funding in Costa Rica: Loopa, a pioneering fund in the country
Third party funding began to make itself known in Costa Rica in recent years, when the need for a viable option to finance expensive litigation, especially in commercial and corporate sectors, became evident. Although the practice of litigation financing is more common in countries with more developed legal markets, such as the United States and Europe, in Costa Rica, Loopa (formerly known as Qanlex) was one of the first funds to introduce this model. Its arrival marked a milestone in the evolution of litigation financing in the country, offering an alternative to litigants who would otherwise not have been able to afford the expenses of prolonged litigation. Since its inception, Loopa has worked tirelessly to provide solutions to those facing complex disputes, giving them access to financing to carry out their legal processes without having to assume the full risk. Loopa, with its innovative approach, has established relationships with lawyers and clients, providing advice and financing so that they can obtain justice without being limited by their economic capacity.
The legal framework for the TPF in Costa Rica: a private agreement within the framework of civil law
Costa Rica is governed by a civil law system, which implies that contracts and agreements between parties are based on principles of autonomy of will and contractual freedom. In this context, the third party funding model fits perfectly with the Costa Rican legal system, as parties can reach private agreements to finance litigation. The only requirement is that such agreements do not contravene public order principles, as established by the Civil Code and the Constitution of Costa Rica. Third party funding in Costa Rica operates through private agreements between plaintiffs and funders, who provide the necessary capital for litigation in exchange for a share in the benefits obtained if the case is successful. This type of agreement is similar to a contingency fee, commonly used by lawyers in the country, who take on the risk of financing the litigation in exchange for a portion of the benefits obtained if the litigation is successful. The difference is that in third party funding, the funder does not necessarily form part of the legal team, but still benefits from the success of the litigation.
The application of the FTA in arbitration: arbitration centers in Costa Rica
In Costa Rica, arbitration has been established as an important form of dispute resolution, especially in the commercial and international sphere. Law No. 7727, the Arbitration Law, regulates this process in the country, providing a legal framework for the efficient and quick resolution of disputes. The main arbitration centers in Costa Rica, such as the Costa Rican Chamber of Commerce and the Center for Alternative Dispute Resolution, play a key role in the administration of both national and international arbitration processes. Litigation funding has great potential in the field of arbitration, as it allows parties involved in commercial or international disputes to finance the high costs of the process without having to bear the full financial burden. Loopa, with its experience in international arbitrations, offers financing solutions for these cases, enabling claimants to maintain control of their claims while receiving the necessary financial support to continue with the process. This opens the door to more companies and individuals seeking to resolve their disputes through arbitration, but who do not have the resources to cover the associated expenses.
The TPF in judicial disputes: facing the costs and duration of cases
Judicial disputes in Costa Rica, especially those involving complex commercial disputes or claims against the State, can last for several years and generate significant costs throughout the process. This phenomenon is largely due to court congestion and the complexity of some cases. As a result, many individuals and companies are forced to abandon their claims or reach unfavorable agreements due to lack of financial resources. Litigation funding emerges as an ideal solution for these cases, as it allows plaintiffs to obtain the necessary funds to cover litigation costs without worrying about their immediate financial situation. Loopa provides crucial support for plaintiffs in Costa Rica, enabling them to finance their cases and pursue justice without time or litigation costs becoming a barrier. This model is particularly relevant in cases against the State, where legal proceedings can be significantly prolonged.
Conclusion: the future of litigation financing in Costa Rica
Litigation financing in Costa Rica is in full expansion and its importance is growing day by day. The introduction of this model in the country has allowed more individuals and companies to have access to justice, regardless of their economic capacity. Loopa, as a pioneer in this field, has shown that litigation financing is not only a viable tool, but also a key solution to facilitate access to justice and follow up on complex cases. With the Costa Rican legal framework, which favors private agreements within the principles of civil law, litigation financing has great potential to continue growing in the country. The future of TPF in Costa Rica looks promising, with a market that is increasingly open to this type of solutions. Loopa, like other financing funds, will continue to play a fundamental role in driving justice in Costa Rica, allowing litigants to access justice without economic limitations and keeping control of their cases in the hands of the appropriate professionals.
