Encyclopedia of Law and Economics

2019 Edition
| Editors: Alain Marciano, Giovanni Battista Ramello

Third-Party Litigation Funding

  • Myriam Doriat-DubanEmail author
Reference work entry
DOI: https://doi.org/10.1007/978-1-4614-7753-2_681

Synonyms

Abstract

Third-party litigation funding allows the transfer by the plaintiff of his/her legal costs to a financial company whose sole aim is to make profit. TPLF have an impact on access to justice but also on conflict resolution and finally on social well-being. The aim is to show how law and economics scholars invest this new field of the conflict literature and study the role of this new actor in the litigation.

Definition

Third-party litigation funding (TPLF) is a financial activity that consists in an investment company specialized in the financing of litigation agreeing to cover all or part of the trial costs of a litigant, in exchange for a portion of the damages paid if the case is won. The remuneration of the funding third party can be a multiple of the initial investment (1.5–6 times), a percentage of the award obtained in a judgment or out-of-court settlement (20–40%, sometimes 50%), or a...

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Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Department of Economics, BETA UMR 7522Université de LorraineNancyFrance