Litigation financing in Hungary: strategic capital in a continental jurisdiction
Litigation financing by third parties (third party funding) is a legal tool increasingly used to facilitate access to justice, redistribute risks, and transform complex disputes into opportunities for economic recovery. In Hungary, a country with a strong judicial system and a legal tradition of civil law, the model is still in its early stages but presents significant potential, especially in commercial litigation, arbitrations, and large-scale claims. Loopa, as an international fund with regional experience, is positioned to support this evolution by offering capital, legal analysis, and a structured approach.
History of third party funding in Hungary
In comparison with other European jurisdictions, Hungary has had a slower adoption of third party funding. The model has not been widely used locally, and for many years it was practically unknown to the majority of legal operators in the country. However, this has started to change. The increasing involvement of Hungarian companies in cross-border disputes, the development of commercial arbitration, the maturation of the legal ecosystem, and exposure to the European legal environment have generated a new interest in tools that allow litigation to progress without immobilizing own resources. International law firms and sophisticated local studies have begun to explore the model as a viable alternative in high-value and uncertain duration cases. In this context, Loopa presents itself as a pioneering partner that introduces structured financing in the country, adapting a proven model to the characteristics of the Hungarian legal and procedural framework.
Legal framework: compatibility with Hungarian civil law
Hungary adopts a civil law system, and its Civil Code (Ptk.) expressly recognizes the autonomy of the will and contractual freedom. This allows parties to enter into private agreements —including litigation financing agreements— as long as they do not violate mandatory rules or principles of public policy. Hungarian law allows for the assignment of claims, even if they are subject to litigation, providing a key tool for structuring the relationship between funder and client. Additionally, while there are restrictions for lawyers regarding fee agreements exclusively contingent on success (quota litis), these limitations do not apply to non-lawyer third parties. Therefore, funders can assume risks and participate in the outcome without violating ethical or procedural rules. This legal framework allows Loopa to operate in Hungary with full legality, respecting the independence of the lawyer, the confidentiality of the case, and the client's control over the procedural strategy.
Arbitration Application: Hungary as an Emerging Regional Venue
Hungary has a modern arbitration law based on the UNCITRAL Model Law and is a signatory to the New York Convention, ensuring the enforcement of international awards and promoting arbitration as an effective alternative to state justice. The country's main arbitration center is the Permanent Court of Arbitration at the Hungarian Chamber of Commerce and Industry (HCAC), based in Budapest. This institution administers national and international arbitrations under modern rules and has begun to attract disputes from sectors such as energy, infrastructure, trade, and technology. Third-party funding is increasingly accepted in international arbitration, and although its use in arbitrations based in Hungary is still limited, there are no legal barriers to its application. Parties can turn to a funder like Loopa to cover the costs of the process: legal fees, expert opinions, translations, institutional fees, and more. Furthermore, the involvement of a specialized fund enhances the strategic position of the claimant, projecting financial strength and increasing the ability to withstand dilatory tactics or unfavorable settlement proposals.
Application in judicial disputes: easing the burden of lengthy processes
The Hungarian judicial system is structured and professional, but like in many jurisdictions, high-value civil and commercial litigation can drag on for several years, especially in cases involving appeals or complex expert opinions. This duration, combined with accumulating legal costs, can discourage companies or individuals with limited resources, even if they have a strong case. This is where the Loopa model adds value: by monetizing the litigation. This means that the client receives an advance on the estimated economic value of the claim and can use that capital today, without waiting for the final judgment. Additionally, Loopa takes on the risk: if the case is not successful, the client does not have to repay the financing. This model allows for strong progress in contractual disputes, enforcement actions, lawsuits against the State, or international impact litigation, without the economic factor being a hindrance. It also contributes to professionalizing legal strategy by enabling the hiring of technical experts or sustaining appeal resources when necessary.
Conclusion: a modern tool for an evolving jurisdiction
Hungary meets the necessary legal conditions for litigation financing to develop: a solid legal framework, openness to arbitration, valid assignment of litigious rights, and a growing interest in solutions that reduce the financial impact of prolonged litigation. Loopa emerges as a key player to introduce the model in a structured manner in the country, with a clear, secure proposal that respects Hungarian legal principles. Whether in complex arbitrations or strategic judicial litigations, Loopa offers capital, support, and legal insight to transform a conflict into a recovery opportunity. Because in Hungary, as in all of Central Europe, access to justice also depends on access to professional financing.
