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EJF joint business statement on Third Party Litigation Funding (TPLF)

EJF, along with 12 other co-signatories have published our joint business statement supporting the European Parliament Report on Responsible Private Funding of Litigation by MEP Axel Voss.

Third Party Litigation Funding (TPLF) allows private financiers, like investment and hedge funds, to sign confidential deals with lawyers or qualified entities to fund lawsuits and arbitration in exchange for a cut of any settlement or judgment/award. TPLF is an estimated €40 to €80 billion market globally. There are more than 100 litigation funders operating in Europe, yet TPLF is largely unregulated in the EU, unlike other financial and legal commercial activities.

In our letter, EJF, together with organisations such as Airlines for Europe (A4E), BusinessEurope, DigitalEurope, European Banking Federation, InsuranceEurope, MedTech Europe and U.S. Chamber Institute for Legal Reform, explain our concerns with this practice. Although the EU Directive on Representative Actions provided for some rudimentary rules around transparency of funders, these rules will only apply to collective actions brought under this one Directive, and not to any other type of claim or law outside the Directive’s scope, including, in particular, those brought via the claims assignment models being operated in various EU Member States.

We are therefore supportive of the European Parliament’s legislative own-initiative report on responsible private funding of litigation, which calls on the European Commission to propose sensible safeguards for effective oversight of TPLF.

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EJF position on Third Party Litigation Funding (TPLF)

EJF is pleased to share its position paper regarding the legislative own initiative report of MEP Axel Voss on Responsible Private Funding of Litigation. EJF outlined points of crucial importance to achieve an effective and coherent legal architecture that safeguards against potential abuses of TPLF. This is because while collective redress mechanisms and TPLF are meant to have a positive impact for consumers in facilitating the access to justice, there is the risk – if no sufficient safeguards are put in place – that private funders’ interests (especially their interest in commercial profit) may be disconnected from – or even opposed to – consumers’ interests. Concrete examples can be seen in the US or in Australia. In Europe we are seeing an increase in cases.

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Need for more third-party litigation funding?

While collective redress mechanism and third-party litigation funding (TPLF) are meant to have a positive impact for consumers in facilitating the access to justice, there is the risk – if no sufficient safeguards are put in place –, that private funders’ interests (esp. their interest in commercial profit) may be disconnected from – or even opposed to – consumers’ interests. Concrete examples can be seen in the US or in Australia. Also in Europe, such cases are meanwhile increasing and tend to spread.  

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Observations from the General Elections in Germany

On 26th September, Germany voted in its federal elections with a high participation rate of 76,6%.  

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EJF updates its comprehensive Monitoring Report on Collective Redress Regulation in Europe

EJF has launched its first Monitoring Report on Collective Redress Regulation in February 2021. EJF’s Monitoring Report provides an overview of the collective redress mechanisms for, so far, 13 selected countries in Europe and the impact that the transposition of the Directive may have.  

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EJF issues first comprehensive Monitoring Report on Collective Redress Regulation in Europe

EJF has launched its first Monitoring Report on Collective Redress Regulation in February 2021. EJF’s Monitoring Report provides an overview of the collective redress mechanisms for, so far, 13 selected countries in Europe and the impact that the transposition of the Directive may have.  

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The Directive on Representative Actions formally approved by the European Parliament

On 24th November the European Parliament formally approved the Directive on Representative Actions, following the trilogue agreement that had been reached by the co-legislators in June 2020.

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Balancing ethics, tech and enforcement for better regulation in Europe

A star-studded line-up of speakers and panelists addressed the topic Better Regulation – Defining a Progressive Approach, during a conference jointly organised by the European Justice Forum and FIPRA International for the second year running.

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