Regulating third-party litigation funding? Weighing the arguments in the light of extant EU consumer protection safeguards

Alexander Morell and Daniel Schellenberg

No 482, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: This paper cautions against the use of consumer protection as a Trojan horse for broader regulation of third-party litigation funding (TPLF) in the EU. The EU already operates a uniform consumer protection framework that prevents adverse outcomes for consumers across the board, including legal services. Section II evaluates a selection of arguments commonly advanced in the debate on regulating TPLF. It reviews frequently invoked concerns and demonstrates why they are unlikely to materialize, suggesting that proponents of regulating TPLF overstate its risks. Section III situates these concerns within the existing EU law framework, demonstrating that many of them are already mitigated by existing legislation. We therefore challenge the premise that restricting litigation funding advances customer protection and advocate for a carefully calibrated approach that preserves the functions of TPLF, intervening only when concrete and demonstrable risks can be observed.

Keywords: Third-Party Litigation Funding; TPLF; EU; Consumer Protection (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:341093

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