Investing in Responsible Litigation: Third-Party Funding for Public Interest Litigation

While public interest litigation ('PIL') is on the rise, it continues to face significant funding challenges. In various sectors, financial barriers to accessing justice such as high litigation costs and a decline in public legal aid have gradually led to the development of private litigation funding mechanisms, such as third-party litigation funding ('TPLF'). The development of TPLF primarily took place in the context of high-value commercial litigation with funders showing little interest in PIL. However, several recent PIL cases appear to have been backed by TPLF, suggesting that the TPLF market might be evolving in a new direction. Against this background, this paper explores the role that TPLF can play in enhancing access to justice in PIL. It attempts to highlight some of the obstacles that third-party litigation funders may encounter when financing PIL and focuses on two specific hurdles. First, the type of relief sought in PIL, which does not necessarily entail substantial pecuniary damages, does not align with the focus of third-party litigation funders on high-value litigation. Second, the difficulty in determining the law that is applicable to TPLF agreements may arguably affect the role of TPLF in PIL. It is indeed currently not clear whether EU courts will assess TPLF based on the law of the forum or based on the law contractually designated by the parties in the TPLF agreement. The last part of this paper explores some avenues for future research aimed at addressing these obstacles and encouraging the use of TPLF in PIL.