Insurance Europe co-signs cross-sector call for EU action on Third-Party Litigation Funding (TPLF)

Insurance Europe has co signed a joint statement on Third-Party Litigation Funding (TPLF), together with a broad cross-sector group of business associations.

The statement responds to recent discussions at the High-Level Forum on Justice for Growth, where the European Commission's (EC) report concluded that there is currently no need for EU-level action on TPLF. The co-signatories take a different view and underline that there is clear and sustained demand for proportionate, harmonised safeguards at EU level.

TPLF is a for-profit business model in which private financiers, investment firms and hedge funds fund litigation in exchange for a significant share of any compensation awarded. The joint statement highlights documented abuses and the rapid growth of profit-driven litigation funding in Europe, in a context where funders operate largely behind confidential contracts and with little or no dedicated oversight. This stands in stark contrast to the extensive regulation of legal and financial services in the EU and risks undermining trust in the justice systems, significantly increasing costs for businesses and ultimately harming European competitiveness and consumers alike.

The joint statement underlines that clear EU safeguards, such as licensing, transparency of funding agreements, responsibility for adverse costs and reasonable limits on funders' fees would enhance fairness and legal certainty without restricting access to justice. With national approaches diverging and cross-border funding on the rise, the group calls on the EC to launch a formal Call for Evidence and advance a proportionate, harmonised EU framework on TPLF. This would help ensure that funding arrangements remain fair, balanced and aligned with claimants' interests, while reinforcing trust in the EU's justice and financial systems.