Litigation funding in Turkey: strategic capital in an emerging economy with high litigation rates.
Turkey is at a convergence point between Europe and Asia, both geographically and legally. With a dynamic economy, an expanding legal market, and a growing involvement in international trade disputes, the country is emerging as fertile ground for the development of third party funding. Although the model is still in its early stages, the conditions are in place for it to become a legitimate and useful tool. Loopa, as a specialized fund, brings experience, structure, and capital to support meritorious cases in one of the most relevant jurisdictions in Eurasia.
History of third party funding in Turkey
Litigation funding does not yet have a consolidated track record in Turkey. The model has traditionally been unknown to most legal operators, partly due to the limited international exposure of many litigations and partly due to the lack of specific regulations. However, in recent years, the growing sophistication of the legal sector, the expansion of arbitration, and the increase in high-value litigations—especially in sectors such as energy, construction, infrastructure, transportation, or foreign investment—have sparked interest in solutions that allow for risk management and capital release during the judicial or arbitral process. Loopa positions itself as a pioneer in introducing the model in a structured and professional manner in Turkey, adapting its proposals to the regulatory and cultural framework of the country.
Legal framework: compatibility with Turkish civil law
Turkey is governed by a civil law system influenced by the Swiss model. The Turkish Code of Obligations and Civil Code recognize contractual freedom, allowing parties to establish valid private agreements as long as they do not violate mandatory rules or public order. The assignment of litigious claims is permitted under Turkish law and provides a solid foundation for structuring financing agreements between the fund and the litigation holder. Through this mechanism, the funder can acquire, wholly or partially, the right to the potential economic outcome of the case. Although there is no specific regulation yet on third-party litigation funding, there are also no rules expressly prohibiting or limiting it. This creates fertile ground for its development, especially if structured transparently, professionally, and with full respect for lawyers' independence and the client's control over their proceedings.
Arbitration Application: Istanbul as an Emerging Venue
Turkey has firmly positioned itself as a hub for international arbitration. Istanbul is home to institutions such as the Istanbul Arbitration Centre (ISTAC), which has gained regional recognition for its professionalism and modern rules, inspired by the standards of the UNCITRAL Model Law. Additionally, Turkey is a signatory to the New York Convention, which facilitates the enforcement of foreign awards. Third-party funding is perfectly compatible with this environment. Although still uncommon in arbitrations administered by ISTAC or in ad hoc proceedings based in Turkey, its growth is expected to be steady as the complexity and cost of international arbitration proceedings increase. Loopa finances arbitrations based in Turkey or involving Turkish parties, covering legal fees, arbitration costs, translations, expert opinions, and other procedural expenses. This allows parties with a strong case to litigate without being hindered by financial limitations.
Application in judicial disputes: a solution against lengthy procedures
The Turkish judicial system, although functional, presents challenges in terms of the duration of processes and available resources. In particular, complex commercial litigation, civil executions, conflicts with the public administration, or high-value contractual disputes can drag on for years, with significant costs for the parties involved. In this context, Loopa offers a specific solution: monetizing litigation. This allows the client to have immediate liquidity through an advance on the estimated value of their claim. Additionally, Loopa assumes the risk: if the case does not succeed, the client is not obligated to reimburse the investment. This model is especially useful for companies with limited resources, individuals with assets in dispute, or international investors looking to mitigate their exposure to prolonged and costly legal proceedings.
Conclusion: strategic opportunity in a jurisdiction with great potential
Turkey brings together the necessary elements for third party litigation funding to consolidate: a compatible legal system, a sophisticated legal market, a growing economy, and increasing litigation in strategic sectors. Third party funding is not only legally viable, but also increasingly necessary from an economic and operational perspective. Loopa arrives in Turkey with a clear proposal: to finance meritorious cases, share risks, and contribute to the strengthening of a modern, efficient, and professional access to justice. Whether in arbitrations in Istanbul or litigations in local courts, we are prepared to provide support to those who are entitled... but cannot wait. Because in Turkey, as in any modern jurisdiction, justice also needs capital to progress.
