Litigation funding in Europe in 2026.

As of October 2026, the European Union has adopted no general rule on litigation funding. Directive (EU) 2020/1828 covers only consumer representative actions Source [1], and each State applies its own law. In the United Kingdom, the 2023 PACCAR ruling called into question the form of funding agreements. The Netherlands and Germany regulate the funders of collective actions. In France, the Versailles Court of Appeal recognised the validity of a litigation funding agreement in 2006, and statute refers to third‑party funding only for group actions.

The reference texts.

The European Union.

Directive (EU) 2020/1828 of 25 November 2020 created a consumer representative action in every Member State Source [1]. Where national law allows it, a third party may fund this action. Article 10 then bars the funder from unduly influencing the entity bringing the action or funding an action against one of its competitors. Where justified doubts arise, the court or administrative authority checks these rules, and the entity discloses to it a financial overview listing the sources of its funds. Outside these actions, the funding of a lawsuit falls under the law of each State.

On 13 September 2022, the European Parliament adopted a resolution “with recommendations to the Commission on responsible private funding of litigation” Source [2]. It asks for a directive that would require funders to hold an authorisation and enough capital for every stage of the proceedings, appeals included. The proposed text rules out any decision‑making power for the funder and reserves at least 60% of the award for the claimant. No directive has followed the resolution, which remains a recommendation.

On 8 October 2024, the European Law Institute published twelve non‑binding principles for third‑party litigation funding Source [3]. They cover capital adequacy, information for the funded party, the lawyer’s independence, conflicts of interest and transparency towards the court.

On 21 March 2025, the European Commission published a study mapping litigation funding in the Member States and four non‑EU countries Source [4]. BIICL and Civic Consulting carried it out, with experts from the Asser Institute and Risk & Policy Analysts. It sets out three approaches without choosing one: no regulation, light‑touch regulation or strong regulation. The Commission’s High‑Level Forum on Justice for Growth discussed the subject in 2025. In the forum’s report of 18 November 2025, participants see, at this stage, no demonstrated need for action at EU level Source [25]. On 30 June 2026, the Commission told the European Parliament it saw no reason to revisit this approach and was monitoring developments in the sector Source [26].

The United Kingdom.

In its PACCAR ruling of 26 July 2023, the Supreme Court held that an agreement paying the funder a percentage of the damages falls under the damages‑based agreements regime Source [5]. Such an agreement is then unenforceable unless it meets those rules, which many funding contracts did not. On 2 June 2025, the Civil Justice Council, which advises the British authorities on civil justice, recommended legislation to reverse that outcome Source [6]. On 17 December 2025, the government announced prospective reform, which Parliament had not passed as of 21 October 2026 Source [24]. Our analysis of the PACCAR ruling traces what followed.

In England, the loser pays rule makes the losing party bear a large share of the other side’s legal fees, and after‑the‑event insurance mainly covers that risk.

The Netherlands.

The WAMCA act of 20 March 2019, in force since 1 January 2020, opens a collective action for damages in the Netherlands Source [7]. A foundation or an association represents the group members who reside in the country, except those who withdraw (opt‑out), and others, as a rule, only if they opt in. Before the merits, the court reviews the entity’s representativeness and means, and requires it to keep sufficient control of the claim as against its funder Source [7]. The Claim Code 2019, a code of conduct with no force of law, was largely written into the WAMCA Source [27]. The official evaluation sent to Parliament on 19 November 2025 calls for clarity on this control test Source [27]. Our guide to the WAMCA act sets out the procedure.

Germany.

In Germany, the Act of 8 October 2023 transposes the 2020 directive, and its article 1, the VDuG, has been in force since 13 October 2023 Source [8]. It makes an association’s action inadmissible when the funder has been promised more than 10% of the performance owed by the defendant business. It also rules out a backer that can be expected to sway the conduct of the proceedings, settlements included, to the detriment of consumers. Our article on German collective redress also covers the bundled assignment of claims, which the Federal Court of Justice has accepted since 2021.

France.

In France, no statute prohibits or organises the funding of an individual lawsuit. The Versailles Court of Appeal accepted it on 1 June 2006, in Foris AG v Veolia Propreté, as a contract of its own kind resting on freedom of contract Source [9]. Article 1102 of the Civil Code sets out the principle: everyone is free to contract and to determine the content of the contract, within the limits set by law Source [14].

The lawyer’s professional rules apply to this funding. The lawyer sets the fees with the client in writing, and professional secrecy covers their exchanges Source [15]. On 20 and 21 November 2015, the National Bar Council found the practice favourable to access to justice, provided the lawyer remains independent and represents the litigant alone Source [16]. On 21 February 2017, the Paris Bar Council specified that only the client instructs the lawyer, and that the lawyer passes no information about the case to the funder Source [17].

For group actions, article 16 of Act no. 2025-391 of 30 April 2025 is the first French statute to refer expressly to third‑party funding Source [10]. It transposes article 10 of the 2020 directive. The funder must exert no influence against the interests of the people represented, and the entity bringing the action makes its funding public. If this is challenged, the court may order the claimant to produce documents showing there is no conflict of interest. Decree no. 2025-1191 of 10 December 2025, applicable since 1 January 2026, organises the approval of the entities and the disclosure of their funding Source [11]. Both texts concern group actions only.

In an individual case, the tripartite agreement, signed by the client, their lawyer and the funder, sets the scope of the funding and the commission due if the case succeeds. Each of these texts appears in the framework in France, and our guide to litigation funding explains how the mechanism works.

Switzerland.

The Federal Supreme Court ruled on 10 December 2004 that a canton cannot prohibit litigation funding (ATF 131 I 223) Source [12]. The practice is accepted in Switzerland, under the lawyer’s professional rules.

International arbitration.

The Arbitration Rules of the International Chamber of Commerce (ICC) in force since 1 June 2026 deal with funding in article 12, paragraph 6, as the 2021 Rules did in article 11, paragraph 7 Source [13]. Each party discloses to the arbitral tribunal the existence and identity of any third party funding its claims or defences with an economic interest in the outcome. In France, litigation funding took hold in arbitration before reaching the courts, as our article on international arbitration explains.

The size of the market.

Research firms put the global litigation funding market at around $11bn in 2018 Source [18] and $19bn in 2024 Source [19]. SNS Insider, Research Nester and Market Research Future project it at $51bn to $65bn in 2035, an annual growth rate of 8 to 14% Source [19]. A projection guarantees nothing, and our reading of these figures sets out what each study measures.

For Europe, a 2021 European Parliament estimate puts the annual revenue of the legal market at €125bn, of which 0.8% goes to litigation funding Source [20]. In the United States, no federal statute specifically regulates this funding, and each state applies its own law, as our article on the US market explains Source [21]. Burford Capital, listed in New York and London, and Omni Bridgeway, listed on the Australian stock exchange and present in 15 countries, publish their accounts Source [22] Source [23]. For an investor, this business forms an asset class whose outcome comes from the sums recovered in cases won or settled. Our report on LitFinCon Europe covers the discussions held in Amsterdam on 7 and 8 October 2026.

Mid‑market litigation.

According to its publications, Burford Capital funds cases of at least $5m Source [22]. Mid‑market disputes, with €100,000 to €1 million at stake, sit well under that threshold. Below that segment, the cost of proceedings becomes disproportionate to the claim, and above it the large international funders step in. The accounts of listed funders therefore cover cases of a different duration and a different risk.

Going to court costs from €30,000 to more than €300,000 in fees and costs, over two to four years, sometimes longer. Hello Justice is the first French company dedicated to mid‑market litigation funding, from €100,000 at stake. It has more than 600 live cases, taken on since 2024. Some of them form a series, like those of the Swiss franc loan programme, where each client keeps their own agreement (serial litigation).

The online eligibility test and submitting a case are free of charge. Outside the Swiss franc loan programme, the case analysis that precedes any funding costs €1,500 excluding VAT (€1,800 including VAT), whatever the opinion. For an accepted case, Hello Justice pays the lawyer’s fees and receives a commission of 14 to 30% including VAT of the sums recovered, only on success. If the case is lost, the client repays nothing, and the agreement settles how the procedural indemnity under article 700 is handled. A Swiss franc loan is checked free of charge, and the programme has its own terms.

An investor will find on the investors page a presentation of the Hello Justice Capital 1 fund and the steps for accessing its documentation, provided once eligibility has been verified. A case can be lost, last longer than expected or end in a judgment the other side does not pay, as the risks page explains.

Frequently asked questions.

Is there EU regulation of litigation funding?

The European Union has no general rule as of October 2026. Directive (EU) 2020/1828 deals with funding only for consumer representative actions Source [1]. The European Parliament asked for a directive on 13 September 2022, and none has followed Source [2]. The study published on 21 March 2025 sets out three approaches without choosing one Source [4]. On 30 June 2026, the Commission found no reason, at this stage, to revisit the approach of the 2025 high‑level forum Source [25] Source [26]. Its participants saw no demonstrated need for EU legislation.

Is litigation funding legal in France?

Yes. The Versailles Court of Appeal accepted the litigation funding agreement on 1 June 2006, under freedom of contract Source [9]. The Act of 30 April 2025 refers expressly to third‑party funding only for group actions Source [10].

Can a funder run the case it funds?

The texts that address the question deny it that role. In France, only the client instructs the lawyer, according to the Paris Bar Council Source [17]. In Germany, a collective action is inadmissible if the funder can be expected to influence the conduct of the proceedings to the detriment of consumers Source [8]. In the Netherlands, the entity bringing a collective action must keep sufficient control of it, failing which the claim is inadmissible Source [7]. The European Parliament recommends ruling out any decision‑making power for the funder Source [2].