Litigation financing in Guatemala: strategic support in a system with challenges
Third party funding is becoming a consolidated tool to improve access to justice in many jurisdictions. It allows a party with a legitimate claim to receive financial support to face the costs of the judicial or arbitral process, in exchange for a portion of the favorable outcome. In Guatemala, where litigation is often prolonged and there can be marked asymmetries between the parties, this model is presented as a modern solution to energize the legal system and provide real defense opportunities to those who have rights but lack capital. Loopa offers that support, combining financial expertise with legal insight.
History of third party funding in Guatemala
Third party funding in Guatemala is still in an incipient stage. There is no developed industry around this model, and its use remains uncommon within the national judicial system. However, the situation is changing. Specialized lawyers, large-scale law firms, and companies with significant litigation have begun to explore this tool as an innovative way to share litigation risk and accelerate financial timelines. Guatemala's increasing exposure to complex commercial disputes, regional arbitrations, and international disputes has favored the arrival of solutions like those offered by Loopa. At the same time, the use of conditional fee agreements by lawyers—although informal and not entirely regulated—shows that the market is open to schemes where compensation is tied to the success of the case. In this context, Loopa positions itself as one of the first specialized funds to offer structured financing in Guatemala, adapting the global model to local legal and procedural realities.
Legal framework: compatibility with continental law
Guatemala adopts a civil law system, with a strong influence from Roman-French law. This framework recognizes contractual freedom, allowing private agreements between parties as long as they do not contravene public order or imperative norms. The Guatemalan Civil Code allows for the assignment of litigious rights, a central concept for structuring financing agreements. Through this assignment, the financier can obtain a share in the economic outcome of the litigation without interfering in the case's control or replacing the client's lawyers. Although quota litis agreements are not expressly regulated, they are used in practice in certain areas of law, reinforcing the legitimacy of models that tie remuneration to litigation success. Thus, the Loopa model is legally viable in Guatemala: it operates as a private contract, respects the lawyer's independence and the client's control, and aligns with the fundamental principles of Guatemalan continental law.
Arbitration application: a growing opportunity
Guatemala has a modern Arbitration Law (Decree 67-95), based on the UNCITRAL Model Law, and is a signatory to the New York Convention, which makes it a recognized jurisdiction for the recognition and enforcement of international awards. Arbitration in Guatemala has grown in recent years, driven by sectors such as infrastructure, energy, construction, and public procurement. Institutions like the Conflict Resolution Commission of the Chamber of Industry of Guatemala (CRECIG) administer procedures under clear and increasingly professionalized institutional rules. While third party funding is not yet widely spread in these forums, there is no legal impediment to its use. International arbitration practice — increasingly influential in the region — tends to accept and normalize the participation of funders, provided that transparency in disclosing conflicts of interest is respected. Loopa can finance arbitrations in Guatemala, covering legal costs, arbitration fees, expert opinions, and other associated expenses, allowing a party with a strong case not to be limited by a lack of resources to move forward.
Application in judicial disputes: monetize time and reduce burden
The Guatemalan judicial system faces structural challenges, including delays, case overload, and high levels of litigation. In particular, civil, commercial, or administrative lawsuits of medium and high value can drag on for years. This poses a real barrier for many plaintiffs who, despite having legitimate rights, lack the capital to sustain a lengthy process or cannot wait for the outcome to access the claimed resources. In this scenario, Loopa offers a concrete alternative: monetizing the litigation. Through financing, the client can receive an advance on the value of the claim, freeing up immediate liquidity and eliminating the financial pressure of the process. Additionally, Loopa assumes the risk: if the case does not succeed, the client does not have to repay anything. This allows companies and individuals with a strong case to access effective justice without compromising their operational resources or jeopardizing their financial stability. It also strengthens the procedural position, enabling them to hire experts, face appeals, or resist dilatory strategies from the opposing party.
Conclusion: a necessary model in a challenging jurisdiction
Guatemala represents a jurisdiction with high potential for the development of third party funding. Its legal framework allows for structuring valid agreements, and its judicial system - although with challenges - generates a real need for solutions that allow litigants to withstand the passage of time and the burden of legal costs. Loopa positions itself as a strategic partner for lawyers, companies, and individuals with meritorious cases. We offer capital, structure, and support to transform prolonged litigation into financeable assets, without interfering with the legal strategy and with total respect for local regulations. Because in Guatemala, as in all of Latin America, justice needs more than arguments: it needs resources to sustain itself.
