Views
Developments in Third-Party Litigation Funding in Europe and Beyond
Written by Adrian Cordina, PhD researcher at Erasmus School of Law, project member of the Vici project ‘Affordable Access to Justice’ which deals with costs and funding of civil litigation, financed by the Dutch Research Council (NWO)
This blog post reports on a conference on Third Party Litigation funding (TPLF) as well as some other activities in the area of costs and funding, including a new project by the European Law Institute on TPLF.
(1) Conference ‘The Future Regulation of Third-Party Funding in Europe’
22 June 2022, Erasmus University Rotterdam
The right of access to civil justice continues to be constrained by the cost, complexity and delays of litigation and the decline in legal aid. Private litigation funding methods litigation like third-party litigation funding (TPLF) and alternative dispute resolution (ADR) methods have been developing, which address these challenges to a certain extent. The debate on whether and to what extent TPLF should be regulated in Europe has also been gathering pace. On the one hand, proponents argue that it facilitates access to civil justice whilst, on the other hand, critics say that there may be risks of abuse. These issues were critically discussed during the conference ‘The Future Regulation of Third-Party Funding in Europe’ held on the 22nd of June 2022. It concluded the online seminar series on ‘Trends and Challenges in Costs and Funding of Civil Justice’ organised by Erasmus School of Law in the context of the Vici project Affordable Access to Justice, financed by the Dutch Research Council (NWO). Team members of the project are project leader Xandra Kramer, and Eva Storskrubb, Masood Ahmed, Carlota Ucin, Adriani Dori, Eduardo Silva de Freitas, Adrian Cordina, assisted by Edine Appeldoorn.
The series commenced in December 2021 with a general session that addressed several topics related to access to justice and costs and funding, including collective redress and litigation costs reforms, and a law-and-economics perspective. The second seminar in January 2022 was dedicated to legal mobilisation in the EU. The third one in February addressed the impact of public interest litigation on access to justice, and the fourth one in March, litigation funding in Europe from a market perspective. The April seminar focused in on austerity policies and litigation costs reforms, and the May session was dedicated to funding and costs of alternative dispute resolution (ADR).
The aim of this seventh and final conference of the seminar series was to reflect on the need and type of regulation of TPLF from different points of view. By seeking to engage representatives from both academia and stakeholders, the conference aimed to foster a lively exchange and contribute to the debate. The event was introduced by a keynote speech by Professor Geert Van Calster (KU Leuven, Belgium) who examined the key issues in TPLF.
The first panel was chaired by Xandra Kramer and addressed the current status quo of the regulation of TPLF and the possibilities of further regulation. Paulien van der Grinten outlined the situation of TPLF in the Netherlands from the point of view Senior Legislative Lawyer at the Ministry of Justice and Security. The presentation of Johan Skog (Kapatens, Sweden) highlighted the lack of factual basis in the European Parliament Research Service Study for the concern of TPLF giving rise to excessive and frivolous litigation. David Greene (Edwin Coe, England) centred his presentation around a critical outlook on litigation costs and funding and the merits and demerits of TPLF in England and Wales. Following the presentations of the first panel, a discussion among the participants and attendees ensued, including discussant Quirijn Bongaerts (Birkway, The Netherlands). Amongst others, the question of disclosure of funding was debated.
The second panel was chaired by Eva Storskrubb (Uppsala University and Erasmus University Rotterdam) and focused on the modes and levels of regulation of TPLF. With respect to the Draft Report with recommendations to the Commission on Responsible Private Funding of Litigation, also examined in an earlier entry in this blog, Kai Zenner (European Parliament, Head of Office (MEP Axel Voss)) focused on the process which led up to the Draft Report and the risks of TPLF. Victoria Sahani (Professor, Arizona State University) approached the issue of TPLF from the perspective of arbitration, both commercial and investor-State arbitration. Finally, wrapping up the second panel and providing reflections connected to the preceding panelists, Albert Henke (Professor, Università degli Studi di Milano) addressed the issue of regulation and the multiple variables it faces.
The conference was held in hybrid format. In spite of some coordination challenges that this posed, both the live audience and online attendants found the opportunity to comment on the presentations and interact with the speakers, also with the use of the chat function. The discussions and interventions showed how opportune the timing of the conference was, as it was held at a period when the Draft Report is being deliberated and scrutinised, and when the debate on regulating TPLF is taking centre stage at a European and international level.
A more extensive conference report is scheduled for publication in the Dutch-Flemish journal for mediation and conflict management (Nederlands-Vlaams tijdschrift voor Mediation en conflictmanagement (TMD).
(2) Further activities and publications on costs and funding
Recently, a special issue of Erasmus Law Review, edited by Vici members Masood Ahmed and Xandra Kramer on Global Developments and Challenges in Costs and Funding of Civil Justice (available open access). This Special Issue contains ten articles and is introduced by an editorial article by Ahmed and Kramer. It includes articles on different aspects of costs in six jurisdictions. John Sorabji focuses on legal aid insurance and effective litigation funding in England and Wales; David Capper on litigation funding in Ireland; Michael Legg on litigation funding in Australian class actions; Nicolas Kyriakides, Iphigeneia Fisentzou and Nayia Christodoulou on affordability and accessibility of the civil justice system in Cyprus; Jay Tidmarsh on shifting costs in American discovery; and Dorcas Quek Anderson on costs and enlarging the role of ADR in civil justice in Singapore. Three papers focus on general topics. Ariani Dori inquires in her paper whether the fact-finding process that supports the preparation of the EU Justice Scoreboard, as well as the data this document displays, conveys reliable and comparable information. Adrian Cordina critically examines, including from a law-and-economics perspective, the main sources of concern leading to the scepticism shown towards TPF in Europe, and how the regulatory frameworks of England and Wales, the Netherlands, and Germany in Europe, and at the European Union level, the Representative Actions Directive addresses these concerns. In view of the UKSC’s finding of non-infringement of Article 6 ECHR in Coventry v. Lawrence [2015] 50, Eduardo Silva de Freitas argues that a more holistic view of the procedural guarantees provided for by Article 6 ECHR is called for to properly assess its infringement, considering mainly the principle of equality of arms.
Some of the papers will be presented during an online seminar that will take place at the end of 2022.
(3) ELI project on Third Party Litigation Funding
The importance of Third Party Litigation Funding is also highlighted by the adoption of a new project by the European Law Institute (ELI) on TPLF. The commencement of the two-year-long project was approved by the ELI Council in July 2022. It will be conducted under the supervision of three reporters (Professor Susanne Augenhofer, Ms Justice Dame Sara Cockerill, and Professor Henrik Rothe) assisted by researchers Adriani Dori and Joseph Rich, and with the support of an International Advisory Committee. The project’s main output will be the development of a set of principles (potentially supplemented by checklists) to identify issues to be considered when entering into a TPLF agreement. Adriani will participate as a project member (together with Mr Joseph Rich). The final outcome is expected in September 2024.
Enforceability of CAS awards in Greece – a short survey
Introductory remarks
Applications to recognize and enforce CAS awards are not part of Greek court’s daily order business. About ten years ago, the first decision of a Greek court was published, which accepted an application to declare a decision of the Court of Arbitration for Sports (CAS) enforceable. For this ruling, see here (in English), and here (in Spanish). Two recent decisions are added to this short list of judgments, where the corresponding decisions of the above sports arbitration body were again declared enforceable
(Piraeus Court of first instance, decision published on 28. July 2021, and Thessaloniki Court of first instance, decision published on 26. April 2022, both unreported).
A summary of the new decisions
The first decision concerned a company of sport? management located in France, who initiated CAS proceedings against a football team in Greece due to non-payment of agreed fees for the transfer of a football player. The CAS granted the application and ordered the payment of 45.000 Euros and 16.391 CHF for the costs of the arbitral proceedings (case number 2018/O/5850).
The second decision concerned two accredited sports managers from Argentina against an Argentinian football player who terminated unilaterally the agreement, hence, he failed to abide by the conditions of the contract signed with the managers. They initiated arbitration proceedings before the CAS, which ordered the payment of 1 million Euros and 49.585,80 CHF for the costs of the arbitral proceedings (case number 2014/O/3726). The player appealed unsuccessfully before the Swiss Supreme Court (no reference available in the text of the decision).
Main findings
From the assessment of the aforementioned decisions, it is possible to draw the following conclusions:
- NYC: The ruler of the game. The application of the New York Convention regarding requests to recognize CAS awards is undisputable and common to all Greek decisions.
- National rules of Civil procedure. From the combination of Articles 3 and 4 NYC, and those of the Greek Code of Civil Procedure (Book on voluntary jurisdiction), it is clearly concluded that the true meaning of Articles 3 and 4 of the above convention is that, the one who requests the declaration of enforceability of a foreign arbitral award, is required to present the relevant decision and the arbitration agreement, either in original or in an official copy, as well as an official translation into the Greek language, during the hearing of his application, and without being obliged to file these documents at the court, when submitting the relevant application.
This because, to the eyes of Greek judges, Article 4 NYC, referring to a presentation “at the time of the application”, does not determine the procedural ‘moment’ (stage) when the documents of the arbitration agreement and the arbitral decision must be submitted to the court. It simply determines the burden of proof and the party borne with it. The procedural method and the time of presentation of the documents referred to in Article 4 § 1 NYC are still regulated by the procedural law of the trial judge, in the case at hand the Greek Code of Civil Procedure.
- Field of application of CAS. On the grounds of the decisions rendered by Greek courts, it has been confirmed that the CAS has jurisdiction over the following disputes:
- Application for arbitration by an athlete against the team in which he plays;
- Application for arbitration by the sports manager of athletes and/or coaches against the sports club.
- Application for arbitration by the sports manager against the athlete.
- Enforceability in the country of origin not a pre-requisite. Contrary to finality, it is not necessary to meet the condition of enforceability of the arbitral award in the state of origin, i.e., Switzerland.
- Enforceability of CAS Costs. The ‘order’ awarding arbitration costs, following the CAS award, must also be declared enforceable, according to Rule R.64.4 CAS Procedural Rules. The matter is noteworthy, as the above ‘order’ is issued after the award by the CAS Secretariat, not by the arbitration Panel that ruled on the dispute, and without the participation of the parties. However, it should be underlined that the letter from the CAS Secretariat merely specifies the amount of the arbitration costs awarded by the Panel; hence, it is considered as belonging to the award’s operative part. In addition, the act of awarding costs is notified to the parties in accordance with CAS rules.
- Irreconcilable judgments. It is not necessary to furnish a certificate of non-irreconcilability with a decision, by following the domestic model of article 903 § 5 and 323 nr. 4 Greek Code of Civil Procedure. According to the judgment of the Greek court, it is not permissible to transfuse a condition regulated by domestic arbitration law into the context of the New York Convention.
- No revision on the merits. Finally, although not directly stated in the text of the NYC, a revision of the foreign arbitral award by the Greek court is prohibited, the latter being unanimously accepted and labelled as the principle of non-examination on the merits.
Case C-572/21: The Court of Justice of the EU on the interrelationship between the Brussels II bis Regulation and the 1996 Child Protection Convention – The perpetuatio fori principle
Written by Mayela Celis, UNED
On 14 July 2022 the Court of Justice of the European Union (CJEU) ruled on the interrelationship between the Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000 (Brussels II bis Regulation) and the HCCH 1996 Child Protection Convention. This case concerns proceedings in Sweden and the Russian Federation and deals in particular with the applicability of the perpetuatio fori principle contemplated in Article 8(1) of the Brussels II bis Regulation. The judgment is available here.
Facts
Mother (CC) gave birth to child (M) in Sweden. CC was granted sole custody of the child from birth.
Until October 2019 child resided in Sweden.
From October 2019 child began to attend a boarding school on the territory of the Russian Federation.
Father (VO) brought an application before the District Court of Sweden and several proceedings ensued in Sweden, holding inter alia that Swedish courts have jurisdiction under Article 8(1) of the Brussels II bis Regulation. CC brought an application before the Supreme Court of Sweden asking the court to grant leave to appeal and to refer a question to the CJEU for a preliminary ruling.
Question referred for preliminary ruling
‘Does the court of a Member State retain jurisdiction under Article 8(1) of [Regulation No 2201/2003] if the child concerned by the case changes his or her habitual residence during the proceedings from a Member State to a third country which is a party to the 1996 Hague Convention (see Article 61 of the regulation)?’
Main ruling
Article 8(1) of Council Regulation (EC) No 2201/2003 of 27 November 2003 concerning jurisdiction and the recognition and enforcement of judgments in matrimonial matters and the matters of parental responsibility, repealing Regulation (EC) No 1347/2000, read in conjunction with Article 61(a) of that regulation, must be interpreted as meaning that a court of a Member State that is hearing a dispute relating to parental responsibility does not retain jurisdiction to rule on that dispute under Article 8(1) of that regulation where the habitual residence of the child in question has been lawfully transferred, during the proceedings, to the territory of a third State that is a party to the Convention on Jurisdiction, Applicable Law, Recognition, Enforcement and Co-operation in Respect of Parental Responsibility and Measures for the Protection of Children, signed at The Hague on 19 October 1996 (our emphasis).
Analysis
This is a very welcome judgment as it allows for the proper application of the 1996 Child Protection Convention to a case involving an EU Member State (Sweden) and a Contracting Party to the 1996 Child Protection Convention (the Russian Federation).
At the outset, it should be emphasised that this case deals with the lawful transfer of habitual residence and not with the unlawful transfer (removal or retention) such as in the case of international child abduction. In the latter case both the Brussels II bis Regulation and the 1996 Child Protection Convention provide for the retention of the jurisdiction in the EU Member State / Contracting State in which the child was habitually resident immediately before the removal or retention.
It is also important to clarify that contrary to the Brussels II bis Regulation, the 1996 Child Protection Convention does not adopt the principle of perpetuatio fori when dealing with general basis of jurisdiction (Article 5 of the Convention; see also para. 40 of the judgment). The 1996 Child Protection Convention reflects the view that the concept of habitual residence is predominantly factual and as such, it can change even during the proceedings.
As to the principle of perpetuatio fori, the CJEU indicates:
“By referring to the time when the court of the Member State is seised, Article 8(1) of Regulation No 2201/2003 is an expression of the principle of perpetuatio fori, according to which that court does not lose jurisdiction even if there is a change in the place of habitual residence of the child concerned during the proceedings” (para. 28, our emphasis).
With regard to the interrelationship between these two instruments, the CJEU says:
“In that regard, it should be noted that Article 61(a) of Regulation No 2201/2003 provides that, as concerns the relation with the 1996 Hague Convention, Regulation No 2201/2003 is to apply ‘where the child concerned has his or her habitual residence on the territory of a Member State’” (para. 32).
“It follows from the wording of that provision that it governs relations between the Member States, which have all ratified or acceded to the 1996 Hague Convention, and third States which are also parties to that convention, in the sense that the general rule of jurisdiction laid down in Article 8(1) of Regulation No 2201/2003 ceases to apply where the habitual residence of a child has been transferred, during the proceedings, from the territory of a Member State to that of a third State which is a party to that convention” (para. 33, our emphasis).
In my view, this judgment interprets correctly Article 52 of the 1996 Child Protection Convention, which was heatedly debated during the negotiations, as well as the relevant provisions of the Brussels II bis Regulation. In particular, the formulation in both Article 61(a) of the Brussels II bis Regulation “where the child concerned has his or her habitual residence on the territory of a Member State” and Article 52(2) of the 1996 Child Protection Convention “[This Convention does not affect the possibility for one or more Contracting States to conclude agreements which contain] in respect of children habitually resident in any of the States Parties to such agreements [provisions on matters governed by this Convention]” has been properly considered by the CJEU as the habitual residence of the child is the Russian Federation.
To rule otherwise would have reduced significantly the applicability of the 1996 Child Protection Convention and would have run counter Articles 5(2) and 52(3) of the referred Convention (see para. 42 of the judgment).
As this judgment only deals with Contracting Parties to the 1996 Child Protection Convention, it only makes us wonder what would happen in the case of bilateral treaties or in the absence of any applicable treaty (but see para. 29 of the judgment).
For background information regarding the negotiations of Article 52 of the 1996 Child Protection Convention see:
– Explanatory Report of Paul Lagarde (pp. 601-603)
– Article by Hans van Loon, “Allegro sostenuto con Brio, or: Alegría Borrás’ Twenty-five Years of Dedicated Work at the Hague Conference.” In J. Forner Delaygua, C. González Beilfuss & R. Viñas Farré (Eds.), Entre Bruselas y La Haya: Estudios sobre la unificación internacional y regional del derecho internacional privado: Liber amicorum Alegría Borrás (pp. 575-586). Madrid: Marcial Pons, pp. 582-583.
News
Journal of Private International Law 20th Anniversary Conference: Call for Paper Proposals
The following information on the Journal of Private International Law 20th Anniversary Conference, to be held at the Faculty of Laws, University College London, Thursday 11 – Saturday 13 September 2025, has kindly been provided by Ugljesa Grusic.
We are pleased to invite the submission of paper proposals for the conference. Submission is open to anyone regardless of seniority or academic affiliation, including postgraduate students and practitioners, with an expectation that you will produce a paper for submission to the Journal of Private International Law by the end of the 2025 calendar year (with publication subject to the usual peer review process). Proposals are welcome on any topic within the scope of the Journal. A proposal should include an abstract of no more than 500 words, as well as details of the name and affiliation(s) of the author(s).
Announcement – Save the Date: Conference on Private International Law and Sustainable Development in Asia
Prof. Zheng Sophia Tang will be hosting a hybrid conference on Private International Law and Sustainable Development in Asia at Wuhan University on 23rd November 2024. This conference will be held both in person and online.
Conference on “Characterisation in the Conflict of Laws” at Oxford, 20–21 March 2025
Information kindly provided by Johannes Ungerer
At the University of Oxford, a conference on ‘Characterisation in the Conflict of Laws’ will be held on 20 and 21 March 2025. It is jointly organised by Dr Johannes Ungerer (University of Oxford and University of Notre Dame in England), Dr Caterina Benini (Catholic University of the Sacred Heart, Milan), and PD Dr Felix Berner (University of Tübingen), and is funded by the Institute of European and Comparative Law and the Faculty of Law.