Litigation funding in Ecuador: equitable access to justice
Litigation funding, also known as third party funding (TPF), is gaining ground in Ecuador as a key option to promote access to justice. This model allows plaintiffs to obtain the necessary financial support to face the costs of complex litigation without having to assume the full economic risk. Through specialized funds like Loopa, individuals and companies can pursue their legal claims without being limited by their economic capacity, opening the door to a fair resolution, regardless of the resources available. This financing model is becoming a vital tool to ensure that all citizens, regardless of their financial situation, can access justice.
History of third party funding in Ecuador: Loopa as a reference in the country
Third party funding began to be more recognized in Ecuador in recent years, when the need for solutions to finance complex litigation started to become evident. Loopa, formerly known as Qanlex, was one of the first funds to introduce this model in Ecuador, positioning itself as a key player in the innovation of litigation financing. Since its arrival, Loopa has worked to offer plaintiffs a financial alternative that allows them to access justice without the economic risks associated with lengthy and costly legal processes. Thanks to the flexibility of the financing model, Loopa has been able to finance a wide variety of cases, from commercial disputes to complex legal cases against the State. Throughout its trajectory in Ecuador, Loopa has demonstrated that this type of financing can be an accessible and effective solution, allowing plaintiffs to continue with their cases without the concern of immediate costs.
The legal framework for TPF in Ecuador: harmony with civil law and private agreements
Ecuador follows a civil law system, which means that agreements between parties are governed by principles of autonomy of will and contractual freedom. This allows third party funding to easily adapt to the country's legal system, as plaintiffs and funders can freely negotiate the terms of the agreement, as long as they do not contravene laws and public policy rules. Third party funding in Ecuador operates through private agreements, in which the funder provides the necessary capital to carry out a litigation in exchange for a share in the profits obtained if the case is successful. This model is similar to the practice of contingency fees, where lawyers take on the risk of financing the litigation in exchange for a portion of the profits obtained if the case is resolved favorably. However, the main difference lies in the fact that the funder of a litigation is not necessarily a lawyer, but an independent third party that assumes the economic risk in exchange for potential profitability.
The application of the FIDIC contract in arbitration: arbitration centers in Ecuador
Arbitration in Ecuador has gained popularity as an efficient way to resolve commercial and contractual disputes. Law No. 446, the Arbitration and Mediation Law, regulates arbitration in the country and establishes a clear legal framework for dispute resolution through alternative means. Among the main arbitration centers are the Quito Chamber of Commerce, the Guayaquil Chamber of Commerce, the Arbitration and Mediation Center of the Cuenca Chamber of Commerce, and the Arbitration and Mediation Center of Amcham Ecuador, all of which have been instrumental in resolving large-scale commercial disputes. Litigation funding in arbitration offers an important solution for parties involved in complex disputes, especially those requiring significant investment in fees and procedural costs. Loopa has expanded its funding model to international and local arbitration in Ecuador, providing parties with the necessary resources to pursue their disputes without bearing the full cost of a lengthy and expensive process. This approach allows companies and individuals to finance their cases, maximizing their chances of success without compromising their financial resources.
The TPF in judicial disputes: a solution to the duration and costs of cases
In Ecuador, judicial disputes, especially those involving commercial disputes or cases against the State, can last for several years, significantly increasing the costs involved in the process. These litigations, besides being lengthy, often involve a large amount of resources, both financial and human. Court congestion and the complexity of cases further exacerbate the situation, which can deter many individuals and companies from pursuing their claims. This is where litigation funding plays an essential role. Loopa provides a financial solution that allows plaintiffs to cover the costs of litigation without having to bear the full economic risk. This is particularly useful in cases against the State, which tend to drag on for long periods and generate significant expenses. With litigation funding, plaintiffs can obtain the necessary support to move forward with their case without the pressure of immediate costs, ensuring that the duration of the process does not become a barrier to reaching a favorable resolution.
Conclusion: the future of litigation financing in Ecuador
The future of litigation financing in Ecuador is promising, as more and more litigants are recognizing the advantages of this model to access justice. As Ecuadorian society becomes more familiar with these solutions, the demand for third-party funding like Loopa will continue to grow. The flexibility of the model and its alignment with the Ecuadorian legal framework, based on civil law principles, ensure that this type of financing is viable and effective. Loopa, as a pioneering fund in Ecuador, has demonstrated that litigation financing is a key tool to open access to justice, allowing more individuals and companies to bring their cases to court without the limitation of associated costs. With a legal landscape increasingly favorable to TPF and growing acceptance from litigants and lawyers, litigation financing is ready to play an important role in the future of Ecuador's judicial system.
