Is It All That Fishy? A Critical Review of the Concerns Surrounding Third Party Litigation Funding in Europe

Virtually all major jurisdictions worldwide, including those in Europe, have been facing constrained budgets in civil justice
and increasing litigation volume, delays, complexity and costs in the last few decades. This makes it difficult, or impossible, for certain individuals and entities to pursue meritorious claims, be it individually or collectively, posing a significant challenge to access to justice. With third-party funding (TPF) of litigation frequently touted as a promising private funding solution to this problem, this article explores the question of how and why the proliferation of TPF has been viewed with a considerable degree of caution in Europe, and questions to what extent this caution is warranted. The scale of the civil justice crisis in Europe, the shift from public to private funding and the purported benefits of TPF are first briefly investigated. The article then proceeds to critically examine, including from a law-and-economics perspective,
the main sources of concern leading to the scepticism shown towards TPF in Europe, which is still largely unregulated.
These sources are the commodification of justice, conflicts of interest and funder capital inadequacy. Particular reference
is made to the regulatory frameworks of the jurisdictions of England and Wales, the Netherlands and Germany in Europe,
and at the European Union level, to the Representative Actions Directive. It concludes by restating the potential benefits and complexity of this industry and the importance of
distinguishing and analysing the arguments most commonly raised against it in the literature, policy and jurisprudence.