Litigation funding in England
England is one of the pioneering jurisdictions in the development and consolidation of third-party litigation funding. Its legal system, based on common law, and its position as a global center for dispute resolution have created an ecosystem particularly conducive to litigation finance. Today, London not only leads the European market, but is also a global reference in this industry, attracting international funds, specialized law firms, and claimants from around the world seeking access to justice without the need to advance their own capital.
"A story of leadership and regulated evolution"
The development of third party funding in England began to consolidate in the 2000s, but its history dates back to an older doctrinal evolution. For centuries, common law prohibited external financing agreements under the principles of maintenance and champerty, which sought to prevent third-party intervention in others' litigation. However, the increasing complexity of modern litigation, together with the need to promote access to justice, led to a more flexible interpretation of these doctrines. Through key judicial decisions and legislative changes, third party funding was progressively decriminalized and recognized as a lawful practice, as long as certain ethical and transparency standards are respected. In 2011, the Association of Litigation Funders (ALF) was created, a self-regulatory body that brings together the main funds in the UK and establishes voluntary conduct guidelines to protect claimants and avoid conflicts of interest.
Legal framework: robust, flexible, and with clear ethical standards
Unlike civil law jurisdictions, England has developed a regulatory framework based on judicial precedents and self-regulation of the sector. Although there is no specific law regulating third party funding, English law expressly recognizes the validity of these agreements, as long as they do not violate public interest or the rights of the funded party. Financing contracts are usually structured with clauses that ensure confidentiality, define the fund's participation in decision-making, and regulate success and loss events. The ALF imposes minimum capital requirements on its members, independence from litigation control, and dispute resolution mechanisms. This provides legal certainty for both the funded party and the investor in a market that values strict compliance with contractual obligations.
Arbitration: London as a global epicenter
London is one of the main centers of international arbitration in the world. Institutions such as the London Court of International Arbitration (LCIA) and the International Chamber of Commerce (ICC) —with operational headquarters in the city—, make England a preferred jurisdiction for the resolution of international commercial disputes. The private and costly nature of arbitration makes third party funding particularly useful in this context. The LCIA expressly allows the participation of external funders, and requires disclosure of their existence to avoid conflicts of interest. In addition, English courts have supported the legitimacy of funding in arbitrations, recognizing its role in promoting access to alternative justice mechanisms.
Judicial disputes: monetization and coverage in complex processes
In the judicial sphere, the English system is known for its formalism, evidentiary rigor, and high associated costs. Although this ensures a high procedural standard, it can also be a barrier for many plaintiffs. Judicial processes can drag on for years and generate significant legal expenses, especially when the involvement of experts, extensive discovery, or multiple resources is required. In this context, third party funding not only covers legal costs but also allows for partial monetization of the litigation, turning a future expectation into immediate liquidity. This is particularly valuable for companies that need to maintain cash flow while the litigation unfolds, or for individuals with recognized rights but without the financial capacity to litigate to the end. Furthermore, in England, it is common for the losing party to pay the legal costs of the winner. Therefore, many funds also offer after-the-event insurance (ATE), a policy that covers the plaintiff in case of defeat. This makes litigation finance a comprehensive solution for litigating without risking the funded party's assets.
Conclusion: a leading and expanding ecosystem
England represents the most mature and sophisticated litigation financing market in Europe. Its reliable legal system, culture of contractual compliance, and central role in international arbitration and litigation make it a fertile ground for the expansion of innovative models like the one proposed by Loopa. In this ecosystem, Loopa brings technology, agility, and a global vision to enhance strong claims with financial support. Whether in complex arbitrations or protracted litigations, third-party funding is an essential tool to transform legal uncertainty into concrete opportunities. In a world where access to justice should not depend on the size of one's wallet, England demonstrates that litigation finance is here to stay—and to lead.
