Student at Symbiosis Law School, Pune, India
The emergence of Third-Party Litigation funding in India could turn out to be the cardinal tool for shepherding justice that has yet to have taken hold in the sub-continent. Third-Party Litigation funding (TPLF) is a form of non-recourse financial support for funding the litigation, mediation, or arbitration costs of a litigating party, in exchange for a part of the damages awarded from the completion of the litigation if the case is won. TPLF has undergone constant change over the years of its practise and has seen gradual acceptance world-wide even though it was met with disdain and restrictions initially. TPLF has been sought after by cash-strapped companies who were struggling to continue operations as well as fighting multiple legal battles. TPLF allows companies to essentially create a win-win situation for themselves. If the funded litigation is successful, the company receives a sizeable percentage of the awards and if the litigation is unsuccessful, the company will have not incurred any expenses either way, as the duty to pay for legal representation and other costs was on the funder and not the litigant. The Opponents for TPLF have called out for the banning of this practise as it can give rise to the abuse of the legal process and a possible increase in frivolous lawsuits. Although there has been negligible growth in India in regards to the TPLF market, it is well-established in other common-law countries across the world such as the U.K., Australia, U.S., Canada, etc.. The industry has seen year-on-year growth from its genesis during the 1990’s to be currently evaluated at over USD 50 billion- USD 100 billion worldwide. With a plethora of hedge funds and private equity firms exploring new investment classes that does not revolve around the global equity markets, it seems India is poised for an explosion of TPLF in the ensuing decade. This paper seeks to act as a comprehensive guide on TPLF, as well as providing a brief outlook on the status of third-party funding in other countries, Further, it discusses the challenges and legal barriers TPLF will face in the Indian subcontinent. Finally, it seeks to answer the question of how truly viable is TPLF in the Indian realm.
International Journal of Legal Science and Innovation, Volume 3, Issue 4, Page 892 - 913DOI: https://doij.org/10.10000/IJLSI.11952
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