Litigation funding in Spain: a tool for access to justice
Litigation funding, also known as third party funding (TPF), has gained relevance in Spain as a key solution to facilitate access to justice, especially in complex or high-value cases. This model allows parties involved in litigation to obtain the necessary capital to finance their cases, without having to assume all the economic risk. With the support of specialized funds like Loopa, litigants can focus on legal issues, without the lack of resources being an obstacle to seeking justice. Litigation funding is therefore presented as an effective alternative to ensure that all individuals and companies can assert their rights, regardless of their financial situation.
History of third party funding in Spain
The concept of third party funding has been gaining ground in Spain in recent years, as the need for financing solutions to address long and costly litigation became more evident. Although this model is more common in countries like the United States or the United Kingdom, Loopa (previously known as Qanlex) was one of the first funds to introduce it in Spain. Since its arrival, Loopa has worked to offer flexible financing solutions that allow litigants to continue with their cases without having to worry about immediate costs. Loopa has funded a variety of cases in Spain, from commercial disputes to complex litigation against the State, providing access to justice for those who cannot afford the high costs of a legal process. This model has been a significant change in the way individuals and companies face legal disputes, ensuring that the economic factor does not become an obstacle to obtaining justice.
Legal framework: civil law and full contractual freedom
Spain follows a civil law system, which means that agreements between parties are governed by principles of autonomy and contractual freedom. This framework is ideal for the implementation of litigation funding, as it allows litigants and funders to reach private agreements on the terms of financing, without state intervention, provided that such agreements do not contravene public policy laws. Litigation funding in Spain operates through private agreements in which the funder provides the necessary capital to finance the litigation, in exchange for a share in the profits obtained if the case is successful. This model is comparable to the practice of contingency fees, in which lawyers take on the risk of financing the litigation in exchange for a portion of the profits obtained. However, unlike contingency fees, in TPF the funder is not necessarily a lawyer and is limited to financing the case, assuming the economic risk of the litigation. This allows more individuals and companies to access justice without having to bear all the financial risk.
The application of the TPF in arbitration: arbitration centers in Spain
In Spain, arbitration is an increasingly used mechanism to resolve commercial and contractual disputes. Law 60/2003, of December 23, on Arbitration, regulates arbitration in the country, providing a clear and efficient legal framework for dispute resolution outside of traditional courts. The main arbitration centers in Spain, such as the Madrid Chamber of Commerce, the Civil and Mercantile Court of Arbitration (CIMA), and the Spanish Arbitration Center (CEA), are key in the resolution of arbitration disputes. Litigation funding has proven to be particularly useful in the field of arbitration, where costs can be high. Loopa has expanded its funding model to arbitrations, providing the necessary resources to finance these cases without the parties having to assume the full economic risk. This allows companies and individuals to continue with their claims without costs being a barrier to progress in their cases, maximizing the chances of success.
The TPF in judicial disputes: a solution to the duration and costs of cases
Judicial disputes in Spain, especially those involving commercial disputes or claims against the State, tend to drag on for long periods, significantly increasing associated costs. Court congestion and case complexity generate a considerable economic burden that can discourage many litigants from pursuing their claims. This situation limits access to justice, especially for those who cannot afford the costs of a prolonged litigation. Litigation funding provides a key solution to this problem, allowing litigants to obtain the necessary capital to cover litigation costs, enabling them to pursue justice without worrying about immediate expenses. Loopa provides this type of funding in both courts and arbitrations, helping to alleviate the financial burden and enabling more individuals and companies to continue with their cases without the duration or cost of litigation becoming an obstacle.
Conclusion: the future of litigation funding in Spain
Litigation funding in Spain has a promising future. As the third party funding model continues to gain acceptance, more individuals and businesses in the country will recognize its benefits as a tool to access justice. The Spanish legal framework, based on principles of civil law and contractual freedom, provides an ideal environment for the growth of this model. Loopa, as a pioneering fund in Spain, has demonstrated that litigation funding is not only a viable solution, but also an effective way to ensure that more litigants can access justice, regardless of their financial situation. With the support of specialized funds, such as Loopa, litigants can proceed with their cases, maximizing their chances of success without the concern of associated costs. Litigation funding is becoming a key tool in the Spanish judicial system, promoting more accessible and equitable justice for all.
