On 21 March 2025, the European Commission published a study on Mapping Third Party Litigation Funding in the European Union (PDF, 6.3MB) (the “Study”).   

The Study stems from the adoption by the European Parliament of a resolution on responsible private funding of litigation on 13 September 2022, urging the European Commission to propose legislation regulating third-party litigation funding in the EU. The Study will guide the European Commission’s future policy decisions regarding third-party litigation funding and in particular, next steps in respect of the European Parliament resolution.  

 The Study: 

• analyses information on varying legal frameworks and practices of third-party litigation funding in EU Member States and certain third countries (Switzerland, United Kingdom, United States and Canada); 
• captures legal analysis based on desk research and national reports (including interviews) and a consultation with stakeholders regarding the regulation and practical operation of third-party litigation funding in their jurisdictions; and 
• considers three options regarding third-party litigation funding: no regulation, light touch regulation and strong regulation. 

The Study will be closely monitored here in Ireland given the ongoing review by the Law Reform Commission (“LRC”) of third-party litigation funding which, save for limited exceptions, is prohibited in Ireland. In its Consultation Paper Third-Party Litigation Funding (PDF,1938KB), the LRC noted the potential significance of the European Parliament resolution as, if a Directive regulating commercial third-party funding is adopted by the EU, Ireland will be obliged to give effect to it.  

The LRC recommendations on third-party litigation funding are highly anticipated due to their potential impact on collective redress. Whilst the  Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the “Act”) was commenced on 20 April 2024, the prohibition on third-party funding impacts the effectiveness of the Act given the likely costs associated with a representative action. 

We will continue to monitor developments and keep you up to date.  In the meantime, if you would like to discuss any of the matters covered in this update in more detail, please get in touch with any member of our Litigation, Dispute Resolution and Investigations Group.