Litigation financing in Honduras: access to capital to promote Justice
Litigation financing by third parties (third party funding) is a legal and financial tool that allows individuals or companies with a legitimate claim to access capital to cover the costs of a judicial or arbitral process, in exchange for a portion of the favorable outcome. In Honduras, where litigation is often lengthy and costly, this model represents an innovative solution for plaintiffs in need of financial support without assuming additional risks. Loopa, as a specialized fund, offers this alternative with a professional, transparent approach tailored to the country's legal reality.
History of third party funding in Honduras
Third party funding model in Honduras is not yet institutionalized. So far, its use has been practically nonexistent in the local legal system, partly due to lack of knowledge of the model and partly due to the absence of financial operators offering it. However, the context is changing. With the growth of commercial disputes, the expansion of arbitration, and an economy increasingly linked to international actors, interest in alternative legal financing mechanisms has begun to emerge. Law firms, companies with complex litigation, and investors with assets trapped in judicial or administrative processes have started exploring ways to turn those claims into available resources today. In this scenario, Loopa emerges as one of the first specialized funds to introduce the model in a structured way in Honduras, offering capital, legal analysis, and an approach that combines international experience with local knowledge.
Legal framework: compatibility with continental law
The Honduran legal system, like in most Latin American countries, is based on civil law. Within this framework, contractual freedom prevails, allowing two parties to enter into private agreements — such as a litigation financing contract — as long as they do not contravene imperative rules or public policy. The Honduran Civil Code recognizes the assignment of litigious credits, enabling the structuring of contracts in which the funder participates in the case outcome, without interfering in legal direction or replacing the lawyer. Furthermore, although the practice of pactum de quota litis (fees conditional on success) is subject to regulation, there is no rule preventing a non-lawyer third party from assuming the economic risk of litigation. This provides a sufficient legal basis for Loopa to operate safely in Honduras, offering a clear, valid contract that is compatible with the fundamental principles of Honduran law.
Arbitration application: natural space for financing
Honduras has a modern Conciliation and Arbitration Law (Decree No. 161-2000), aligned with the principles of the UNCITRAL Model Law, and is a signatory to the New York Convention, allowing for the recognition and enforcement of international awards. Arbitration has grown in the country, especially in sectors such as energy, infrastructure, construction, and public procurement. Institutions like the Conciliation and Arbitration Center of the Chamber of Commerce and Industry of Tegucigalpa (CCIT) and other regional centers have promoted the professionalization of national arbitration. While third party funding is not yet a common practice in these forums, its integration is perfectly viable, and the international trend towards transparency and neutrality favors its incorporation. Loopa is able to finance arbitrations based in Honduras or involving Honduran parties, covering everything from legal fees to expert costs, translations, institutional fees, and procedural logistics. This allows the claimant to move forward without immobilizing resources, leveling the playing field against better capitalized counterparts.
Application in judicial disputes: financial relief against lengthy processes
The Honduran judicial system faces structural delays, caseload overload, and lack of resources, causing many civil, commercial, or administrative litigations to drag on for years. This situation particularly affects medium-sized companies, individuals, or creditors with assets trapped in complex legal processes. Loopa proposes a direct solution: monetizing litigation. This means that the claimant can receive an advance on the expected value of the litigation—depending on the merits of the case and risk analysis—and, in exchange, Loopa assumes the financial risk. If the case is unsuccessful, the client does not have to repay anything. In addition to covering legal costs, this model allows for strengthening procedural strategy, hiring technical experts, or resisting appeals and dilatory tactics, enhancing the client's negotiating position. Loopa's model also provides legitimacy and sends a clear signal to the opposing party: the case is backed and structured to proceed to the end.
Conclusion: a modern tool for more accessible justice
Honduras faces significant challenges in terms of judicial efficiency, but its legal framework allows for the clear and secure implementation of the litigation financing model. The assignment of credits, contractual freedom, and the growing openness to arbitration provide the necessary conditions for third party funding to consolidate as a real solution for those seeking justice without compromising their financial stability. Loopa, with experience in Latin America and Europe, is prepared to lead this process in Honduras, offering financing, legal analysis, and strategic support for meritorious cases. Whether in judicial litigation, complex executions, or high-value arbitrations, we are ready to help ensure that capital is not an obstacle to progress. Because in Honduras, as in the entire region, justice should not depend on who has more resources, but on who is right.
