European Reluctance against Third-Party Litigation Funding – Tensions between Private and Public Interests

Third-party litigation funding (TPF) encounters considerable reluctance in Europe. On the one hand this is surprising, because TPF can improve access to justice and does not necessarily suffer more from ‘agency problems’ and conflicts of interest than accepted funding methods such as hourly fees and legal expenses insurance. On the other hand, if the focus shifts from this ‘public interest perspective’ to a ‘private interest perspective’, the reluctance is less surprising. TPF benefits some interest groups while it is unattractive for others. The latter groups are likely more effective in advocating their interest, which explains this reluctance against TPF.