Litigation financing in Peru: a solution for access to justice
Litigation financing, or third party funding (TPF), is emerging as a key tool to improve access to justice in Peru. This model allows plaintiffs to finance the costs of complex litigation without having to assume all the economic risk associated with it. Through specialized funds like Loopa, individuals and companies can take their cases to courts or arbitrations, without the high costs being an obstacle to obtaining justice. This model promotes a more equitable access to justice, allowing litigants to focus on resolving their disputes, regardless of their financial capacity.
History of third party funding in Peru: Loopa as a pioneering actor
Third party funding has begun to gain relevance in Peru in recent years, as the need for financing options for costly and lengthy litigation becomes more evident. Loopa, formerly known as Qanlex, was one of the first funds to introduce this model in the country, marking a milestone in litigation financing in Peru. Since its arrival, Loopa has worked to offer financing alternatives that allow litigants to continue with their legal cases without having to assume all the economic risk of the process. Loopa has financed a wide range of cases, from commercial disputes to complex litigation against the State, providing access to justice to those who would not have been able to afford the costs of prolonged litigation otherwise. Thanks to its flexible approach, Loopa has enabled more individuals and companies to access justice, regardless of their economic capacity.
The legal framework for TPF in Peru: contractual freedom within civil law
Peru follows a civil law system, which implies that agreements between the parties are governed by the principles of autonomy of will and contractual freedom. This legal framework is ideal for third party funding, as it allows the involved parties to freely agree on the terms of financing, without state intervention, as long as they do not contravene public order laws. The third party funding model in Peru operates through private agreements, in which the funder commits to covering the litigation costs in exchange for a share of the benefits obtained if the case is successful. This model is similar to the practice of contingency fees, where lawyers take on the risk of financing the litigation in exchange for a portion of the benefits. However, in TPF, the funder is not necessarily a lawyer, but an independent third party that assumes the risk in exchange for a return. This type of agreement, which involves the assignment of litigation rights, is adaptable to the Peruvian legal system and complements existing legal practices.
The application of the FTA in arbitration: arbitration centers in Peru
In Peru, arbitration has become an increasingly popular option for resolving commercial, contractual, and labor disputes. Law No. 26589, which regulates arbitration in Peru, provides a favorable legal framework for resolving conflicts outside of traditional courts. Among the main arbitration centers in the country are the Arbitration Center of the Lima Chamber of Commerce (CCL) and the Conflict Resolution and Arbitration Center of the Arequipa Chamber of Commerce, which play a fundamental role in the administration of both national and international arbitration cases. Litigation funding has been effectively adapted to the field of arbitration, especially in complex commercial disputes where costs can be high. Loopa has extended its funding model to arbitration, providing financial resources that allow parties involved in arbitration disputes to continue with the process without the pressure of associated high costs. This type of funding is crucial in the international arena, where disputes can involve significant costs and uncertainty about outcomes can discourage litigants from moving forward with their case.
The TPF in judicial disputes: a solution to the duration and costs of cases
In Peru, judicial disputes, particularly those involving commercial disputes or claims against the State, can be lengthy and costly processes. Congestion in the courts and the complexity of cases increase costs, which can lead litigants to abandon their claims or reach less favorable settlements due to lack of resources. This situation creates a significant barrier to accessing justice, especially for those with limited resources. Third party funding offers an important solution, allowing litigants to obtain the necessary financing to cover litigation costs. This enables them to proceed with their cases without the pressure of immediate expenses, resulting in more equitable access to justice. Loopa, for example, finances cases in both courts and arbitration, ensuring that litigants can pursue their claims regardless of the costs and duration of judicial processes, particularly in disputes against the State that tend to be lengthier.
Conclusion: the future of litigation financing in Peru
The future of litigation financing in Peru looks promising, as this model has started to be recognized as a viable option to facilitate access to justice. With a legal system that favors the autonomy of private agreements within civil law, third party funding has found a conducive environment for its expansion in the country. Loopa, as a pioneering fund, has shown that litigation financing is a key tool to ensure that more individuals and companies can access justice, regardless of their economic capacity. As the market continues to familiarize itself with the benefits of this model, it is expected that the demand for litigation financing will continue to grow in Peru. With the support of funds like Loopa, litigants can face their cases with greater security and without the burden of high procedural costs. Litigation financing will continue to play a crucial role in the Peruvian judicial system, promoting a more accessible and equitable justice for all citizens.
