Litigation funding is redefining access to justice in Europe

LEADERS LEAGUE: In your opinion, how is litigation funding helping to improve access to justice in Europe, for both businesses and individuals? 

Cristina Soler: In October 2025, the European Law Institute (ELI) published a set of principles providing guidance on key issues relating to the conduct of funders and funded parties; one of the most notable points is the recognition that litigation funding ensures access to justice.   

Firstly, the financier’s ability to provide greater resources for the case is an advantage for companies or individuals who would otherwise be unable to meet the legal costs of litigation or arbitration. Furthermore, financing the case not only means that the costs of litigation or arbitration are paid by the financier, but the right financier can also contribute a number of factors that are highly relevant to the success of the proceedings and the smooth handling of the matter.  

The funder’s track record or experience in similar matters will be an added benefit for the funded party, which will have access to specialist professionals whom it would otherwise be unable to reach or meet. Consider, for example, damages claims brought in cases of competition law infringements, which is a highly specialised field where it is common for the injured parties to turn to litigation finance to obtain funds to cover the costs of the litigation, which involves highly complex expert reports and the management of a large volume of accounting documentation. In such cases, litigation funding also helps to level the playing field for claimants in the litigation. 

How is litigation funding influencing the way in which companies structure their dispute resolution strategies? 

Litigation financing, beyond improving a company’s liquidity and mitigating the accounting impact of litigation or arbitration, is a way for companies to generate returns on their legal assets and mitigate risks. A particularly significant aspect is that structures can be put in place whereby the risks of the litigation or arbitration are transferred to the financier, which undoubtedly has an impact on the resolution of disputes. An example of this is the monetisation of claims, judgments and arbitral awards, which involves advancing the economic value of the litigation or arbitration to the claimant without waiting for the outcome, thereby avoiding the risks associated with the enforcement phase of the proceedings.   

Furthermore, as noted in the RAMCO report on the state of litigation financing in Spain, which we produced in collaboration with ESADE in 2023, it is useful for large companies and multinationals as well as for SMEs, consumers and sole traders. This reflects the flexibility of litigation financing in making an impact at both ends of the business spectrum. 

How has the litigation and arbitration finance market in Spain developed in recent years? How do we compare with other European or global markets?  

Litigation and arbitration financing in Spain is an active and growing market. Since the first financiers entered the Spanish market in 2017, the Spanish market has seen exponential growth year on year, with an increase in demand for financing from law firms, individuals and companies who view this as a means of reducing costs and managing risks.    

A litigation funder is simply another legal player in the litigation landscape, just like law firms, and is now regarded as a common feature in many cases, particularly those involving complex issues and high costs.  

In an international context, according to the Swiss Re report, the third-party financing sector is most active in the United States (accounting for over 50% of the market), followed by Australia, the United Kingdom and Germany (the United Kingdom and Germany together account for over 27% of the market). Spain ranks fourth among the most active European countries, according to the European Parliament report.  

Evidence of the establishment of litigation funding in Spain can be found in the regulations on litigation funding drawn up by the main Spanish arbitration chambers and in the provisions included in the draft bill on representative actions. 

Litigation funders are no longer outsiders; they are established players in the dispute resolution ecosystem

What types of cases or sectors are typically the most in demand for litigation finance in Spain? Have you identified any recent trends in this area? Are there any particularly hot trends or areas at the moment?  

In recent years, private enforcement of competition law—particularly damages claims following the transposition of the Damages Directive into Spanish law, such as the lorry and car cartel cases—has been one of the main drivers of litigation funding in Spain, with third-party funding used in most of these cases. Other growing areas include restructuring and insolvency, tax, and industrial and intellectual property.  

According to the 2023 RAMCO report, funding is primarily used in civil and commercial matters (80%), followed by administrative (10.9%), tax (6.3%) and IP. Sector-wise, it is most common in construction and infrastructure (36.2%), followed by energy (20%).  

Additionally, the use of third-party funding in international arbitration has increased significantly, especially in commercial and investment arbitration in sectors such as construction, infrastructure and energy. Over 55% of respondents reported using funding mainly in arbitration, likely due to the complexity and high value of these disputes.  

Overall, this reflects the flexibility of litigation finance and its broad application across sectors.  

In the current European debate, how can a balance be struck between the need for regulation and the preservation of the flexibility that characterises litigation funding, without undermining its impact on access to justice? 

The European debate on litigation funding regulation is highly relevant. While regulation is welcome, it must be proportionate and flexible, protecting funded parties without restricting access to justice. A key distinction should be made between consumer cases, which may require stricter rules, and business cases, where freedom of contract should prevail. 

Initiatives such as the European Law Institute (ELI) Principles and emerging national frameworks point in the right direction, recognising funders as legitimate actors while promoting transparency.  

Ultimately, the balance lies in ensuring clear rules on conflicts of interest and procedural control, while preserving the flexibility needed to adapt funding structures to different types of cases. 

Flexible regulation is key to preserving access to justice

Are you seeing a shift towards portfolio-based funding models, and to what extent might these models broaden access to dispute financing mechanisms?  

Indeed, financing structures have evolved. It has been observed that litigants have not only sought to finance the costs of litigation, but there is also growing market interest in other innovative forms of financing, such as portfolio financing. Increasingly sophisticated financing structures are being created, including the monetisation of judgments or awards and the purchase of portfolios of claims (portfolio funding), the appeal of which lies in mitigating risk for the financier and in which the financing structures or terms may be even more attractive to claimants.  

These structures involve the advance of capital against the future outcome of the claim. From the perspective of the claimant, this offers enormous advantages, as, apart from incurring no costs, it is a way of mitigating risks. 

Looking ahead to the coming years, what role do you think litigation funding will play in democratising access to justice in Europe?  

I am convinced that litigation funding will play a key role in democratising access to justice in Europe in the coming years. As highlighted in the RAMCO report, it is as useful for large companies and multinationals as it is for SMEs, consumers and sole traders. This versatility makes it a genuinely democratising tool, ensuring access to justice regardless of a party’s size or financial capacity. 

In the short to medium term, the growth of class actions in Europe is expected to significantly increase the need for funding. At the same time, more sophisticated financing structures will allow companies and individuals to monetise legal assets and mitigate risks, including through mechanisms such as the monetisation of court judgments and arbitration awards. 

In short, litigation funding will continue to strengthen the European justice system, provided that the future regulatory framework remains flexible and supportive, allowing the market to grow and remain attractive for both funders and users.