A Maltese law analysis of third party litigation funding

Abstract

This thesis deals with third party litigation funding and will put a strong emphasis on its analysis from a Maltese law perspective. Litigation has become an expensive process with costs becoming somewhat prohibitive to certain individuals. This has seen a rise in the popularity of third party funding in several prominent jurisdictions such as Australia, the United States and the United Kingdom. Considering this background, it is important to analyse whether the Maltese jurisdiction is prepared for the introduction of such an industry, and whether the practice itself is regulated at all. Chapter 1 provides an overview of the topic, providing definitions and a historical background depicting the evolution of the industry in foreign jurisdictions. The second chapter discusses the legal nature of third party litigation funding, whilst investigating its major characteristics and comparing it to other agreements. Chapter 3 builds upon these ideas and discusses the regulation of third party funding in Malta. The Civil Code, the Banking Act, Financial Institutions Act, and Investment Services Act are examined in detail in order to determine whether third party funding falls within any of the parameters set out by the legislator. Chapter 4 conducts a comparative analysis of how third party funding is regulated within major jurisdictions and other European countries. Reference is made to case law, foreign law, and numerical data. The following chapter discusses the ethical implications which third party funding brings with it, and discusses foreign jurisprudence and legal opinions. This thesis is focused on the possible regulation of third party litigation funding. The current legislative framework will be discussed throughout in order to reach the best possible outcome in regards to regulating this industry.