Criminal Law Limits On Litigation Finance

As an innovative method to share litigation risks,third-party litigation investment(litigation financing)is an opportunity for the financial industry to enter the legal industry,which is an opportunity for both the financial industry and the legal industry.For the financial industry,civil litigation is an activity with economic benefits,especially for some litigation with a large amount of litigation,litigation results can often bring huge economic returns to the parties.The big returns are also obvious if the sector invests.For the legal profession,litigation costs money and comes with certain risks.For a lawsuit,the risk is not only the risk of winning the lawsuit,but also the risk of collecting the money after winning the lawsuit.The entry of the financial industry into the litigation field precisely caters to the common psychological needs of litigants and lawyers to avoid or reduce litigation risks.Litigation financing is the result of the combination of financial industry and legal industry,which is the trend of The Times.Litigation crowdfunding is a kind of financing mode that the third party litigation investors hope to realize.Third-pasty litigation investors mostly exist in the form of limited liability companies in China.For example,Shenzhen Qianhai Dingsong investment Co,,Ltd.(Hereinafter referred to as "Dingsong"),which was established in July 2016,is engaged in tjird-party litigation investment with its capital source supported by the founding shareholders' own funds.After three years of industry development and improvement of business model,obtaining efficient and safe external financing becomes the core strategy of Dingsong in the next development cycle.Based on the investigation of Dingsong in the past three years,the author believes that its future financing port lies in Internet crowdfunding rather than non-financial investment institutions.The reasons are as follows:1.The efficient performance Internet crowdfunding better supports the surge of litigation investment demand.With the development of the society,people pay more and more attention protecting their rights according to law.Tere is a certain approval process for financial investment institutions to decide on investment,so the efficiency of capital entering the litigation investment field becomes low.Litigation is a limited activity.The efficiency of Internet crowd-funding lies in that it can release relevant information through the crowd-funding platform along with the emergence of the investment demand of litigation cases,and almost timely release the investment demand of litigation cases to obtain financing,so that the litigation cases that need to be invested can obtain financing within the effective period to carry out litigation activities smoothly.2,Many financial investment institutions have slowed down their investment plans for third-party litigation investment institutions.Financial investment institutions are more cautious about third-party litigation and investment in such emerging business nodels.One is novelty,Financial institutions need to consider their past porformance and business data when investigating projects.However,as third-party litigation investment institutions are still in the embryonic stage in China?and the setlement time of civil litigation cases is mostly between 2 and 3 years,major complex cases may be more than 3 to 5 years.As a result,for investment institutions,such companies lack an important financial data reference,Another factor is the economic environment.In the past two years,most Investment institutions have slowed down their investment plans due to the econonic downturn.These two are the main reasons that the third party litigation investment company is difficult to get the favor of investment institutions.Intrnet crowdfunding has the advantages of low threshold and high efficiency.Once launched,it develops rapidly and extends to all walks of life.The third-party litigation invcsiment under the Internet crowd-funding has not yet started in China,but there are successful cases in the United States.Britain and other European and American countries.Examined in detail in this paper the investment model of third-party action mechanism and the pattern of raising financing through the internet all the overseas practice,first of all,from the perspective of criminal law ruled out the pattern implementation in China of illegal property,secondly combining with our country to all the raise and the regulation of the third party litigation investment present situation,put forward the third party litigation investment using the Internet in China to implement the idea of all the way to rise financing.As a representative ofthe emerging Internet finance field,crowdfunding can not only solve the financing difficulties of small and micro enterprises to a large extent,but also provide a new financing channel for civil litigation.However,in order to play a greater role in economic development Internet finance represented by Internet crowthfunding needs the support and care of the whole society.At present,the legislation related to Internet crowd-fundng is far from perfect,and the regulatory measures are also incomplete.Many behaviors are between legal and illegal(crime)This not only makes practitioners bear high risks,but also makes most potential investors feel confused,making a large amount of private capital in a wait-and-see attitude and unable to enter the market to add vitality to China's economic development.Therefore,policies and legislation are urgently needed to guide the development of the whole industry.