Litigation funding in Luxembourg: legal sophistication and access to capital
Luxembourg, one of the most important financial centers in Europe and home to significant legal and investment institutions, is also in the process of opening up to third party funding. With a predictable legal system, a high volume of commercial litigation, and a growing arbitration activity, the country offers a favorable environment for the development of this type of solutions. Loopa, as a specialized fund, is ready to operate in Luxembourg providing capital, structure, and experience in complex litigation.
History of third party funding in Luxembourg
Although Luxembourg was not a pioneer in Europe in the adoption of third party funding, its legal and financial ecosystem makes it a natural candidate for the expansion of the model. In recent years, there has been a growing interest from law firms, investment funds, and corporate clients in exploring innovative ways to finance litigation, especially those with high economic value or international components. This interest has been driven by the global trend towards active legal risk management, the need to release capital tied up in legal disputes, and the sophistication of the Luxembourg financial market, accustomed to operating with complex contractual structures. Loopa positions itself as a fund suitable for channeling this demand, providing not only financing but also rigorous analysis of legal merit and contractual structures compatible with the local legal framework.
Legal framework: continental law and contractual freedom
Luxembourg is governed by a civil law system, with a strong influence of French law. There is no specific legislation regulating third party funding, but the general principles of private law —especially contractual freedom— allow parties to enter into valid financing agreements, as long as public policy provisions are not violated. The assignment of litigious rights is permitted under Luxembourg law, and can be used to structure the funder's participation in the case outcome. Furthermore, the legal system does not impose restrictions on non-lawyer third parties assuming the financial risk of litigation, allowing the model to be implemented without interfering with the lawyer's work or altering the procedural dynamics. In this environment, Loopa can operate while respecting the principles of lawyer independence, confidentiality, and client control over the litigation, ensuring a transparent and legally secure structure.
Arbitration application: recognized venue for international disputes
Luxembourg has gained relevance in international arbitration, particularly in commercial, banking, and investment disputes. The country is a signatory to the New York Convention and its domestic legislation is aligned with the UNCITRAL Model Law, ensuring legal certainty, neutrality, and recognition of international awards. Although third party funding practice is not yet widespread in arbitrations seated in Luxembourg, its legitimacy is unquestionable, and institutional rules tend to promote its acceptance, provided that transparency and disclosure principles are respected in case of potential conflicts of interest. Loopa can finance arbitrations administered in Luxembourg or involving Luxembourgish parties, covering legal costs, arbitral fees, expert fees, and other expenses. Our approach combines capital with strategic support to increase the likelihood of success and balance the power dynamics between the parties.
Application in judicial disputes: liquidity in the face of long and complex processes
Although the Luxembourgish judicial system is efficient compared to Europe, complex civil and commercial litigation - especially in higher instances or in processes with technical or financial content - can drag on for years. This poses a challenge for companies in need of immediate liquidity or for plaintiffs with limited financial capacity. The financing offered by Loopa allows to monetize the litigation, turning a right to expectation into available capital today. This is particularly valuable in contexts such as civil executions, asset recovery, insolvencies, contractual litigation, or cross-border disputes. Furthermore, the backing of a specialized fund like Loopa strengthens the procedural strategy, allows for hiring experts, resisting prolonged appeals, or negotiating from a stronger position, by demonstrating that the case has been evaluated and has external professional support.
Conclusion: efficiency, sophistication, and responsible financing
Luxembourg offers a unique combination of legal certainty, procedural efficiency, and financial sophistication. Although third party funding is still in an early stage of development in the country, its legal legitimacy, compatibility with continental law principles, and practical utility in complex litigation make it a tool with great potential. Loopa arrives in Luxembourg with a clear proposal: to offer strategic financing, secure contractual structures, and a professional approach to maximize the value of litigation. Whether in institutional arbitrations or high-value judicial disputes, our model is designed to free up resources, reduce risks, and confidently move towards a favorable resolution. Because in Luxembourg, as in all of Europe, access to justice is also built with smart capital.
