Insurance Europe has supported a call from the European Parliament for appropriate supervision of the third-party litigation funding (TPLF) sector.
Insurance Europe has indicated that EU supervision of the TPLF sector, which is estimated as a €40 to €80 billion market globally, would be in the interests of both consumers and businesses.
Funding agreements could be regulated so that exorbitant fees are not permitted and to ensure that funders cannot discontinue financial support without cause. Funders could also be required to have capital reserves to cover their commitments.
The risk of abuse of process would also be reduced as the courts would have knowledge of the existence of a funding agreement and would have oversight powers to oversee conduct.
If the European Commission introduces legislation in this area, it could overturn the centuries-old prohibitions on champerty and maintenance in Ireland.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.