Litigation funding in Uruguay: access to capital in a stable and predictable jurisdiction
Uruguay, recognized for its institutional strength, legal security, and reliable regulatory environment, offers ideal conditions for the development of innovative legal solutions. In this context, third party funding emerges as an effective tool to enable companies and individuals with legitimate claims to access justice without compromising their liquidity. Although still in its early stages in the country, this model fits perfectly with the Uruguayan legal framework. Loopa, as a specialized fund, is positioned to lead its development with professional structures adapted to local regulations.
History of third party funding in Uruguay: Loopa as a pioneer
Unlike other Latin American countries with greater international exposure, such as Brazil or Mexico, Uruguay does not yet have a developed litigation financing industry. The model has been sparsely used until a few years ago, partly due to a lack of structured offerings and partly due to a lack of awareness of the mechanism among legal operators. The concept of third party funding began to gain relevance in Uruguay in recent years, especially when the need for financing solutions to face long and costly litigation became 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 Uruguay. Since its arrival, Loopa has worked to offer flexible financing solutions, allowing litigants to continue with their cases without worrying about immediate costs.
Legal framework: civil law and contractual freedom
Uruguay follows a civil law system, which means that agreements between parties are governed by principles of autonomy and contractual freedom. This framework is ideal for the implementation of litigation financing, as it allows litigants and funders to reach private agreements on the terms of financing, without state intervention, as long as such agreements do not contravene public policy laws. Third party funding in Uruguay operates through private agreements in which the funder provides the necessary capital to finance the litigation, in exchange for a share in the profits obtained if the case is successful. This model is comparable to the practice of contingency fees, in which lawyers take on the risk of financing the litigation in exchange for a portion of the profits obtained. However, unlike contingency fees, in TPF the funder is not necessarily a lawyer and is limited to financing the case, assuming the economic risk of the litigation. This allows more individuals and companies to access justice without having to assume all the financial risk.
Arbitration Application: Uruguay as a Neutral and Reliable Venue
Uruguay has taken firm steps towards the consolidation of a modern arbitral environment. The International Commercial Arbitration Law (Law No. 19,636) is based on the UNCITRAL Model Law, and the country is a signatory to the New York Convention, ensuring the enforcement of international awards. Institutions such as the Center for Conciliation and Arbitration of the Chamber of Commerce and Services of Uruguay promote fast, effective procedures with clear rules, making arbitration an increasingly used option in commercial, corporate, and contractual disputes. Although third-party funding is not yet common in arbitrations seated in Uruguay, its use is perfectly compatible with the current legal framework. Arbitration rules do not prohibit it, and the regional and international trend is towards its progressive normalization. Loopa is prepared to finance arbitration proceedings in Uruguay, covering legal fees, institutional costs, expert expenses, translations, and other procedural costs, allowing parties to access this mechanism without being limited by lack of resources.
Application in judicial disputes: monetize time and distribute risk
The Uruguayan judicial system, although well regarded in institutional terms, can present significant delays, especially in high-value civil and administrative litigation or in processes involving the State. These delays, together with the costs associated with the process, can represent a real barrier for plaintiffs. In this context, the Loopa model allows for the monetization of litigation, that is, advancing a portion of the estimated claim value so that the client has immediate liquidity. This financing can be used to sustain operational expenses, strengthen the legal strategy, or simply reduce the financial pressure of the process. Furthermore, Loopa assumes the risk: if the case does not succeed, the client is not obligated to repay the capital received. This makes financing an effective tool for sharing legal and financial risk without losing control of the litigation.
Conclusion: an innovative solution in a strong jurisdiction
Uruguay combines institutional stability, legal security, and a flexible regulatory environment, making it an ideal jurisdiction for the development of alternative legal financing models. Third-party litigation funding is perfectly compatible with Uruguayan law and provides a concrete response to the needs for liquidity, risk sharing, and financial sustainability in complex litigation. Loopa, with international experience and a structured approach, arrives in Uruguay to finance meritorious cases, support law firms and companies in strategic proceedings, and contribute to real and effective access to justice. Because in Uruguay, as in all of Latin America, litigating with strength also requires economic support.
