Analysis Of Legal Dilemma In European And American Practice Of Litigation Financing Agreement

The litigation financing agreement has emerged with the development of litigation financing.As an agreement where a third party outside the case provides litigation funds to the parties in exchange for a certain percentage of returns after the dispute is resolved,but loses the lawsuit but does not get any money,its practice has been controversial.The litigation financing agreement not only compensates for the shortcomings of the judicial system,provides a new path to judicial relief for the parties who cannot afford the litigation costs,but also may bring about undesirable consequences such as the funder’s manipulation of the judicial system and the waste of social resources.In the judicial practice of some European and American countries,the practice development of litigation financing agreements has gone through twists and turns,and its nature is not yet clear.Its effectiveness is still affected by such aspects as maintenance and champerty,as well as the irregularity of the terms of the agreement itself.The privacy of the agreement is also an unavoidable issue in judicial practice.The privacy of the funding behavior and whether the agreement data is protected by special principles so that it may be disclosed and other issues need to be discussed in detail.This article is based on European and American countries where the practice of litigation financing agreements is relatively rich.After clarifying the basic concepts and particularities of litigation financing agreements,this article analyzes the legislation of the United States,Canada,Australia,the United Kingdom and other European and American countries that are at the forefront of the development of litigation financing agreements.Discuss the practice of litigation financing agreements with typical cases,in order to find out the essence of the problem.The nature of the agreement is defined as a loan contract that does not conform to its essential characteristics and should be defined as investment.The view of dormant partnership is essentially investment.Regarding the determination of the effectiveness of the litigation financing agreement in practice,the out-of-date concept of maintenance and champerty should be abolished,and the financier’s improper control of the funded case should also be restricted,and more reasonable factors should be retained.The privacy of litigation financing agreements is divided into three aspects: funding behavior,funding reimbursement clauses,and case information.They are discussed from the simpler to the deeper,and dealt with in different ways.Based on a comprehensive discussion of the legal dilemmas of European and American practices in litigation financing agreements,it reflects on the practice status of litigation financing agreements,with a view to contributing modest efforts to the development of litigation financing agreements.