While the US, Europe and Australia dominate the conversation around litigation funding, there is a clear uptick in the sector’s adoption in other countries and regions. Latin America is one of these areas experiencing a growth in litigation finance, with countries like Brazil and Mexico leading the way.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
While the US, Europe and Australia dominate the conversation around litigation funding, there is a clear uptick in the sector’s adoption in other countries and regions. Latin America is one of these areas experiencing a growth in litigation finance, with countries like Brazil and Mexico leading the way.
In an interview with LexLatin, senior counsel for Deminor’s Latin America practice, Paloma Castro, discussed the increase in appetite from in-house lawyers and other industry professionals who seek third-party funding for litigation. In particular, Castro highlights the regularity of arbitration proceedings as a key driver in these countries’ adoption of external funding, given the range of costs that are attached to arbitration.
Castro also discusses the lack of a strict regulatory framework around third-party funding in Latin America, noting that the main issue for regulators in the region is around disclosure of funding agreements to try and avoid conflicts of interest for arbitrators. With regard to broader implementation of legislation focused on litigation funding, Castro suggests that funders should take the view that as long as there is no prohibition against the mechanism, then it should be viewed as implicitly allowed within these jurisdictions.
