Litigation financing in Paraguay: an alternative for accessible justice
Litigation financing, also known as third party funding (TPF), is emerging as a key tool to improve access to justice in Paraguay. This model allows litigants to obtain the necessary financial support to face the costs of litigation without assuming all the economic risk. Through specialized funds like Loopa, individuals and companies can pursue their legal claims without having to worry about the expenses associated with legal proceedings. This model promotes accessible justice, enabling plaintiffs to bring their cases to court or arbitration without the economic factor becoming a barrier.
History of third party funding in Paraguay: Loopa as a reference in the country.
The concept of third party funding has been gaining ground in Paraguay in recent years, as the need for financial solutions for long and costly 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 Paraguay. Since its arrival, Loopa has offered flexible solutions that allow litigants to continue with their legal cases, regardless of their financial situation. Through its innovative approach, Loopa has funded a variety of cases, from commercial disputes to complex litigation against the State, providing access to justice to those who cannot afford the costs of a judicial or arbitral process. Loopa has been instrumental in changing the way Paraguayans face legal disputes, helping to ensure that everyone has access to justice, regardless of their economic capacity.
The legal framework for ADR in Paraguay: autonomy of private agreements in civil law
Paraguay follows a civil law system, which means that agreements between parties are governed by principles of autonomy and contractual freedom. This allows third party funding to fit perfectly within the country's legal system, as the involved parties can reach private agreements without the need for state intervention, provided that such agreements do not contravene public order laws. Third party funding in Paraguay is structured through private agreements, in which the funder provides the necessary capital to cover litigation costs in exchange for a share in the benefits derived from the case if successful. This model is comparable to the practice of contingency fees, where lawyers take on the risk of litigation costs in exchange for a percentage of the profits obtained. However, unlike contingency fees, the funder in TPF does not necessarily form part of the legal team and is exclusively involved in financing the case, making it an investment with high potential for profitability and risk.
The application of the FIDIC contract in arbitration: arbitration centers in Paraguay
Arbitration is an increasingly popular form of dispute resolution in Paraguay, especially in the commercial and international sphere. Law 5293/14 regulates arbitration in the country, providing a clear legal framework for resolving conflicts outside traditional courts. The Arbitration Center of the Chamber of Commerce and Services of Paraguay (CCSP) and the Dispute Resolution Center of the International Chamber of Commerce (ICC) are some of the main arbitration centers in the country. Litigation financing has proven to be a very useful tool in arbitration, where costs can be high due to the complexity and duration of the proceedings. Loopa has extended its financing model to arbitration, offering a financial solution for companies or individuals who need to finance their participation in an arbitration without assuming the total economic risk. This allows the parties to focus on resolving the conflict without the costs of the process being a hindrance to moving forward with their claim.
The TPF in judicial disputes: a solution to the duration and costs of cases
Judicial disputes in Paraguay, especially those involving commercial disputes or claims against the State, can be lengthy and costly processes. Congestion in the courts and the complexity of some cases lead many individuals and companies to abandon their claims due to the high procedural costs and uncertainty about the duration of the cases. This situation limits access to justice for those who cannot afford the cost of prolonged litigation. Third party funding offers a solution to this problem, allowing litigants to obtain the necessary financing to cover the costs of litigation, enabling them to move forward with their cases without having to worry about immediate expenses. This is particularly important in cases against the State, which often drag on for long periods. With financial support from Loopa, plaintiffs can finance their cases and continue their pursuit of justice, without the duration of the litigation becoming a barrier to obtaining a favorable resolution.
Conclusion: the future of litigation funding in Paraguay
Litigation financing in Paraguay is in full growth, and its impact on access to justice is consolidating. Loopa, as a pioneering fund, has shown that third party funding is a fundamental tool to ensure that all litigants, regardless of their economic capacity, can access justice. With a legal framework that favors private agreements within civil law and a growing demand for financing solutions, the future of TPF in Paraguay looks promising. Loopa will continue to play a key role in expanding litigation financing in the country, offering plaintiffs the possibility to finance their cases and move forward with their claims without the traditional economic limitations. Third party funding is transforming the way Paraguayans face legal disputes, ensuring that justice is accessible to all, regardless of their resources.
