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Litigation Funding:
advantages and services offered

Third-party litigation funding (TPLF) is a practice whereby a third party, known as a litigation funder, finances the legal costs of a party involved in a legal dispute, assuming the financial risk in exchange for a share of the proceeds obtained in the event of a favorable outcome. This instrument, which originated in Anglo-Saxon legal systems, is also gaining ground in Italy and offers significant opportunities for both companies and individuals.

How does litigation funding work?
In the context of TPLF, the funder pays all or part of the legal costs associated with a dispute, be it out of court, in court or in arbitration. In the event of success, the funder receives a pre-agreed percentage of the proceeds; otherwise, the funder bears the loss of the investment without recourse to the funded party. The main parties involved are:

  • Litigation funder: specialised companies, investment funds or individual investors who provide the funding.
  • Funded party: an individual, company or public body that needs financial support to maintain a litigation.
  • Legal team: professionals who assess litigation risks and potential returns, structure funding agreements and manage litigation.

Benefits of TPLF

TPLF offers several benefits:

  • Access to justice: allows those with limited resources to take legal action without the immediate burden of costs.
  • Risk management: transfers the financial risk of the uncertain outcome of litigation to the funder.
  • Optimisation of resources: companies can allocate their financial resources to other activities by shifting the costs of litigation to the funder.
  • Greater fairness: allows for greater equity in legal disputes, as (financially) weaker parties can compete more evenly against opponents with greater financial resources.

The Italian context
In Italy, litigation funding is still in its early stages but is attracting increasing attention. Recent studies point to an investment potential in the Italian market that currently stands around EUR 185 million and will reach EUR 325 million by 2027. This figure shows significant growth and increasing interest in TPLF within the Italian legal system.

Application examples
Currently, most litigation funding cases in Italy concern antitrust litigation, international arbitration, commercial litigation, and disputes related to intellectual property and medical liability. In the future, funding for disputes relating to computer fraud, climate change and sustainability is expected to increase significantly.

Operators in the Italian market
National and international operators are active in the Italian market, providing financial resources, expertise, and bargaining power to support complex litigation, bearing the costs of litigation and the risk of failure in exchange for the right to receive a share of the recovery. The operators mainly target law firms, professionals, companies, and public bodies, offering solutions to monetise in advance the expected outcome of litigation.

Future prospects
According to many observers, litigation funding is a phenomenon that will grow exponentially in Europe and in Italy in the coming years. This solution facilitates access to justice and is used both by large companies wishing to externalise the costs and risks associated with the uncertainty of litigation, and by SMEs that do not have sufficient resources to adequately face and manage legal disputes.

Conference organised by RPLT in October 2025
In order to deepen the topic of litigation funding and its implications in the Italian context, in October 2024 we have organized a conference gathering industry experts, legal professionals and company representatives to discuss the opportunities, prospects and challenges related to TPLF. A second edition of the conference will be organised in October 2025. (If interested in attending the next event in October 2025, please email marketing@rplt.it).

RPLT’s main services in TPLF

We offer our clients a range of strategic services in the area of TPLF, both for funders and for parties seeking funding, with the aim of facilitating access to this resource and optimising the management of disputes, as well as assisting in the integrations of TPLF into corporate legal strategies, with the aim of reducing financial risk and accessing justice with greater economic security.

Here are some of the main services we offer:

1. Feasibility analysis and case evaluation

  • Preliminary assessment of the litigation to determine whether it is suitable for litigation funding.
  • Analysis of legal merit and likelihood of success.
  • Estimate of legal costs and potential economic returns.
  • Drafting memoranda for the litigation funder to present the case in a compelling manner.

2. Finding and selecting litigation funders

  • Identification of the most appropriate funders for any type of litigation.
  • Comparison of the various funding offers available.
  • Assistance in negotiating with litigation funders to obtain the best contractual terms.

3. Structuring the funding agreements

  • Drafting and reviewing funding agreements.
  • Advice on legal compliance and possible tax implications.

4. Managing the funded litigation

  • Strategic coordination between client, funder, and legal team.
  • Monitoring compliance with covenants and litigation milestones.
  • Periodic reporting to litigation funder.
  • Assistance in any negotiations for early settlement of the dispute.

5. Recovery and distribution of sums

  • Assistance in the enforcement of the judgment, award, or settlement agreement.
  • Supervision of the distribution of sums between the client and the funder.
  • Advice on any tax profiles associated with the recovery of sums.

6. Training and education on litigation funding

  • Organizing workshops and seminars for business associations, companies, and individuals.
  • Writing articles and information material on TPLF.

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“Certified B Corporation” is a trademark licensed by B Lab, a private non-profit organization, to companies like ours that have successfully completed the B Impact Assessment (“BIA”) and therefore meet the requirements set by B Lab for social and environmental performance,accountability, and transparency.

It is specified that B Lab is not a conformity assessment body as defined by Regulation (EU) no. 765/2008, nor is it a national, European, or international standardization body as per Regulation (UE) no. 1025/2012.

The criteria of the BIA are distinct and independent from the harmonized standards resulting from ISO norms or other standardization bodies, and they are not ratified by national or European public institutions.