In the last six months, Italian law firms have seen a significant increase in contacts with companies potentially interested in litigation.
The TPF or litigation funding consists, in summary, in the intervention of a financier in a legal case or in an arbitration. The objective of the financier is to obtain a return, obviously assuming that the cause has more than a good chance of success. The customer, for his part, finds the financial support to support a cause that, otherwise, would not have started for cost reasons or immediately monetizes the (theoretical) right to compensation.
To demand the start of a due diligence from specialized investors today are also companies that would have the means to bear the legal expenses, perhaps already involved in international cases, but that following the Covid-emergency19 need to control liquidity and curb exits and, for this reason, decide to explore the way of financing. In some cases they are not at the beginning of a dispute, but in the running.
In other cases the sale of a favorable praise today becomes more interesting than before. Or, in order to obtain the execution of a judgment, we rely on a fund so as not to aggravate the budgets further.
The fund Omnibridgeway records an increase of demands for financing and in the last six months it is engaged to finance almost 7 million euros towards Italian customers in international causes (compared to approximately EUR 1 million in the previous six months linked to a single collective action). There is an increase of 15% globally compared to the same period of the previous year.
On a global scale, litigation funding is highly developed in the US, Canada and Australia, but it is also gaining ground in Europe and particularly in the Netherlands, Switzerland and Norway.