| Abstract [eng] |
This paper analyses the litigation funding model, in which a third party who is not a party to the litigation provides funding for the costs of the claimant (or, in rare cases, the defendant), in exchange for a remuneration that depends on the outcome of the litigation. The third-party funding of litigation costs, which has so far been the predominant funding model in the common law tradition, is gaining traction in the continental law tradition, including Lithuania. The main objective of this paper is to answer the question: how should this model be assessed in Lithuania, should it be encouraged or limited? An analysis of the positions in legal doctrine on why litigation funding should be encouraged (to guarantee the right to a judicial remedy, to deter potential infringers from unlawful conduct, to encourage the conclusion of fair settlement agreements) and why litigation funding should be prohibited (to encourage unjustified litigation, potential breach of the principle of impartiality of judges or arbitrators, loss of control by a party to make substantive decisions in relation to the dispute, breach of the principle of loyalty of counsel), it is concluded that the current legislation does not reasonably prohibit the conclusion of an agreement on the financing of litigation costs. However, the potential threats to this institution, as identified in legal doctrine, should not be ignored. Therefore, the paper proposes to introduce an obligation for the parties to disclose the fact of funding and the identity of the funder. In this way, it would be possible to ensure the implementation of the principle of impartiality of judges and arbitrators and to provide an opportunity to collect data on the peculiarities of the Lithuanian litigation costs financing market. Having assessed the current model for the reimbursement of litigation costs incurred by litigants, it is concluded that limiting the amount of litigation costs to be awarded to the prevailing party may lead to a refusal of the funder to invest in the litigation in Lithuania. |
