2020/2130(INL) Responsible private funding of litigation
Next event: Indicative plenary sitting date 2022/05/02
Lead committee dossier:
Next event: Indicative plenary sitting date 2022/05/02
Progress: Awaiting committee decision
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | JURI |
VOSS Axel ( EPP)
|
BENIFEI Brando ( S&D),
TOUSSAINT Marie ( Verts/ALE),
LEBRETON Gilles ( ID),
BUXADÉ VILLALBA Jorge ( ECR),
AUBRY Manon ( GUE/NGL)
|
| Committee Opinion | ECON |
Lead committee dossier:
Legal Basis:
RoP 47
Legal Basis:
RoP 47Subjects
Events
Documents
| Amendments | Dossier |
| 327 |
2020/2130(INL)
2021/07/19
JURI
327 amendments...
Amendment 1 #
Motion for a resolution Citation 1 a (new) — – having regard to Article 47 of the Charter of Fundamental Rights of the European Union,
Amendment 10 #
Motion for a resolution Recital A b (new) Amendment 100 #
Motion for a resolution Annex I – paragraph 10 – point 3 (3) As the internal market facilitates increasing cross-border trade, as disputes are increasingly cross-border, and as the activities of litigation funders are global in nature, there is a potential risk of material divergences in Member State approaches to safeguards and the protections necessary with regard to third party funding
Amendment 101 #
Motion for a resolution Annex I – paragraph 10 – point 3 (3) As the internal market facilitates increasing cross-border trade, as disputes are increasingly cross-border, and as the activities of litigation funders are global in nature, the risk of material divergences in Member State approaches to safeguards and the protections necessary with regard to third party funding is acute. Voluntary approaches have
Amendment 102 #
Motion for a resolution Annex I – paragraph 10 – point 3 (3) As the internal market facilitates increasing cross-border trade, as disputes are increasingly cross-border, and as the activities of litigation funders are global in nature, the risk of material divergences in Member State approaches to safeguards and the protections necessary with regard to third party funding is acute. Voluntary approaches have not been successful or subscribed to by the majority of the industry, and, in any event, non-legislative measures would not be appropriate in light of such material risks
Amendment 103 #
Motion for a resolution Annex I – paragraph 10 – point 4 (4) This Directive aims to regulate commercial third-party litigation funding, a
Amendment 104 #
Motion for a resolution Annex I – paragraph 10 – point 4 (4) This Directive aims to regulate third-party litigation funding, a commercial practice whereby third-party entities not directly involved in a dispute invest for profit in legal proceedings, typically in exchange for a percentage of any settlement or award. Third-party litigation funding does not include provision of funds to sponsor litigation on a charitable or donated basis, or similar activities carried out on a pro bono publico basis. This Directive aims to preserve funding and access to justice for victims of violations of human rights, workers’ rights, consumers’ rights and the protection of the environment. This Directive also aims to lay down safeguards to prevent conflicts of interest, abusive litigation as well as the disproportionate allocation of monetary awards to litigation funders.
Amendment 105 #
Motion for a resolution Annex I – paragraph 10 – point 4 Amendment 106 #
Motion for a resolution Annex I – paragraph 10 – point 4 a (new) (4 a) Establishing a common Union framework of minimum standards for responsible third-party litigation funding can not only constitute a powerful tool to promote access to justice, but also to ensure appropriate corporate accountability. Indeed a significant economic imbalance exists between corporations and citizens seeking redress, and third-party litigation funding can help reduce it, if properly regulated and in complementarity with other measures removing barriers to access to justice;
Amendment 107 #
Motion for a resolution Annex I – paragraph 10 – point 4 a (new) (4 a) This Directive aims to prohibit third-party funding for investment arbitration, considering the impossibility to enforce governance, transparency, capital adequacy, and observance of a fiduciary duty obligations in this opaque domain of dispute settlement. This prohibition also aims to preserve States form a multiplication of the number and the volume of investors’ claims that hinders States’ ability to regulate in the general interest.
Amendment 108 #
Motion for a resolution Annex I – paragraph 10 – point 5 (5) The term ‘litigation funder’ should be understood to refer to any commercial undertaking that is not a party to proceedings, but enters into a third-party litigation funding agreement (‘third-party funding agreement’) in relation to those proceedings. In line with the case-law of the Court of Justice of the European Union, the concept of ‘undertaking’ includes any entity engaged in an economic activity, regardless of its legal status and the way in which it is financed, and therefore includes any legal person, including its parents, subsidiaries or affiliates and could include professional litigation-funding providers, financial services providers, claims management firms or other service providers. The specification that an undertaking is commercial clarifies that the undertaking must be established with the intention to make profits. This excludes non-governmental organisations, foundations and other organizations working for the public interest as well as public entities. The concept of litigation funder is not intended to include lawyers representing a party in legal proceedings, or regulated providers of insurance services to such a party.
Amendment 109 #
Motion for a resolution Annex I – paragraph 10 – point 6 (6) In accordance with the legal traditions and autonomy of the Member States, it is for each Member State to determine whether, and to what extent, the provision of litigation funding should be
Amendment 11 #
Motion for a resolution Recital A c (new) A c. whereas the Commission Report COM/2018/040 on “benchmarking the 2013 non-binding recommendations on collective redress” highlights that TPLF is a key aspect of collective redress which has an important cross-border dimension;2b _________________ 2bhttps://eur-lex.europa.eu/legal- content/EN/TXT/PDF/?uri=CELEX:5201 8DC0040&from=EN, page 10.
Amendment 110 #
Motion for a resolution Annex I – paragraph 10 – point 6 a (new) (6 a) In those Member States where legal costs represent a significant barrier to access justice, however, it would be appropriate to introduce legislation to allow third-party litigation funding, establishing clear conditions and safeguards according to the provisions of this Directive. At the same time, Member States should take measures aiming to ensure that the costs of the proceedings related to representative actions do not prevent qualified entities from effectively exercising their right to seek redress, in accordance with Directive 2020/1828 and in particular its Article 20.
Amendment 111 #
Motion for a resolution Annex I – paragraph 10 – point 7 (7) Where third party litigation funding activity is permitted, a system for the authorisation and supervision of commercial litigation funders by independent administrative bodies in the Member States is
Amendment 112 #
Motion for a resolution Annex I – paragraph 10 – point 8 (8)
Amendment 113 #
(9) Supervisory authorities within the Union granting authorisations to conduct commercial third-party litigation funding activities should be operating independently from any private, political or governmental influence. They should be empowered to require that litigation funders comply with minimum criteria laid down by this Directive.
Amendment 114 #
Motion for a resolution Annex I – paragraph 10 – point 9 (9) Supervisory authorities within the Union granting authorisations to conduct third-party litigation funding activities
Amendment 115 #
Motion for a resolution Annex I – paragraph 10 – point 9 (9) Supervisory authorities within the Union granting authorisations to conduct third-party litigation funding activities should be empowered to require that litigation funders comply with minimum criteria laid down by this Directive. Such criteria should include provisions relating to governance, transparency, capital adequacy, and observance of a fiduciary duty to claimants and intended beneficiaries. Supervisory authorities should be empowered to make any necessary orders, including the power to receive from litigation funders applications for authorisation and to decide upon them, to gather any necessary information, grant, deny, suspend or withdraw any authorisation or to
Amendment 116 #
Motion for a resolution Annex I – paragraph 10 – point 9 (9) Supervisory authorities within the Union granting authorisations to conduct third-party litigation funding activities should be empowered to require that litigation funders comply with minimum criteria laid down by this Directive. Such criteria should include provisions relating to governance, transparency, capital adequacy, and observance of a fiduciary duty to claimants and intended beneficiaries. Supervisory authorities should be empowered to make any necessary orders, including the power to receive from litigation funders applications for authorisation and to decide upon them, to gather any necessary information, grant, deny or withdraw any authorisation or to impose any condition, restriction or penalty upon any litigation funder, as well as to investigate
Amendment 117 #
(11) Litigation funders should be required to commit to being bound to a duty to act fairly, transparently efficiently and in the best interests of claimants and intended beneficiaries of claims while respecting existing EU confidentiality rules. A lack of a requirement to place the interests of claimants and intended beneficiaries ahead of a litigation funder’s own interests creates the risk of proceedings being directed in a manner that ultimately serves the interests of the litigation funder, rather than those of the claimant.
Amendment 118 #
Motion for a resolution Annex I – paragraph 10 – point 11 (11) Litigation funders should be required to commit to being bound to a duty to act fairly, transparently and in the best interests of claimants and intended beneficiaries of claims. A lack of a requirement to place the interests of claimants and intended beneficiaries ahead of a litigation funder’s own interests creates the risk of proceedings being directed in a manner that ultimately
Amendment 119 #
Motion for a resolution Annex I – paragraph 10 – point 11 (11) Litigation funders should be
Amendment 12 #
Motion for a resolution Recital A d (new) A d. whereas women and marginalised groups may face additional funding barriers;
Amendment 120 #
Motion for a resolution Annex I – paragraph 10 – point 11 (11) Litigation funders should be required to commit to being bound to a duty to act
Amendment 121 #
Motion for a resolution Annex I – paragraph 10 – point 12 (12) To prevent circumvention of the requirements of this Directive, agreements entered into with commercial third party funders not having the necessary authorisation should have no legal effect. The burden to acquire the necessary authorisations should be on litigation funders themselves, and therefore claimants and intended beneficiaries should be indemnified in respect of any harm caused by a litigation funder not having the necessary authorisation.
Amendment 122 #
Motion for a resolution Annex I – paragraph 10 – point 12 (12) To prevent circumvention of the requirements of this Directive, agreements entered into with third party funders who do not hav
Amendment 123 #
Motion for a resolution Annex I – paragraph 10 – point 13 (13) This Directive should regulate the activities of litigation funders, but should be without prejudice to any other regulatory obligations or regimes that may apply, respecting the legal traditions of the Member States, their autonomy and their decisions regarding on the appropriateness of regulating litigation funding in their national legal systems.
Amendment 124 #
Motion for a resolution Annex I – paragraph 10 – point 13 (13) This Directive should regulate the activities of litigation funders, but should be without prejudice to any other regulatory obligations or regimes that may apply, including regulations on financial services.
Amendment 125 #
Motion for a resolution Annex I – paragraph 10 – point 13 (13) This Directive should regulate the activities of commercial litigation funders, but should be without prejudice to any other regulatory obligations or regimes that may apply.
Amendment 126 #
Motion for a resolution Annex I – paragraph 10 – point 16 (16) To facilitate the provision of cross border litigation funding services in those Member States where it is permitted under national law, Member States should be able to cooperate, share information, and should be required to take full account of each other’s authorisation decisions. In line with article 56 TFEU, Member States should mutually recognise prior authorisations and therefore automatically grant authorisation to litigation funders operating in their Member State, that have been authorised to operate in another Member State for as long as the initial authorisation continues to exist. In case a supervisory authority in a receiving Member State is aware of irregularities in the conduct of the litigation funder, it should directly inform the responsible supervisory authority.
Amendment 127 #
Motion for a resolution Annex I – paragraph 10 – point 16 (16) To facilitate the provision of cross border litigation funding services in those Member States where it is permitted under national law, Member States should be able to cooperate, share information and best practices, and should be required to take full account of each other’s authorisation decisions.
Amendment 128 #
Motion for a resolution Annex I – paragraph 10 – point 16 a (new) (16 a) Member States should ensure that comprehensive and clear information and guidance on how to take and to fund a claim are fully and freely accessible to all citizens who might seek redress, including to the most vulnerable groups.
Amendment 129 #
Motion for a resolution Annex I – paragraph 10 – point 17 (17) Member States should ensure that decisions regarding the relevant legal proceedings, including decisions on settlement, are not unduly influenced or controlled by the litigation funder in a manner that would be detrimental to the interests of the claimants concerned by that action.
Amendment 13 #
Motion for a resolution Recital A e (new) A e. whereas a significant economic imbalance exists between corporations and citizens seeking redress, and TPLF can help reduce it;
Amendment 130 #
Motion for a resolution Annex I – paragraph 10 – point 18 Amendment 131 #
Motion for a resolution Annex I – paragraph 10 – point 18 (18) Courts or administrative authorities should be empowered to
Amendment 132 #
Motion for a resolution Annex I – paragraph 10 – point 19 (19) Courts or administrative authorities should be empowered, where a third-party funding agreement is relevant to the case before them
Amendment 133 #
Motion for a resolution Annex I – paragraph 10 – point 19 (19) Courts or administrative authorities should be empowered, where a third-party funding agreement is relevant to the case before them, either upon request by a party to the proceedings
Amendment 134 #
Motion for a resolution Annex I – paragraph 10 – point 22 (22) The adequacy of supervision of litigation funders and third-party funding agreements cannot be ensured absent obligations on litigation funders to be transparent regarding their activities. This includes transparency vis-à-vis courts or administrative authorities,
Amendment 135 #
Motion for a resolution Annex I – paragraph 10 – point 22 (22) The adequacy of supervision of litigation funders and third-party funding agreements cannot be ensured absent obligations on litigation funders to be transparent regarding their activities. This includes transparency vis-à-vis courts or administrative authorities, defendants and claimants, and therefore obligations should apply to disclose third party funding agreements in full to courts or administrative authorities and defendants or other parties to the dispute, subject to appropriate limitations to protect any necessary confidentiality.
Amendment 136 #
Motion for a resolution Annex I – paragraph 10 – point 22 (22) The adequacy of supervision of litigation funders and third-party funding agreements cannot be ensured
Amendment 137 #
Motion for a resolution Annex I – paragraph 10 – point 22 (22) The adequacy of supervision of litigation funders and third-party funding agreements cannot be ensured absent obligations on litigation funders to be transparent with claimants and public authorities regarding their activities. This includes transparency vis-à-vis courts or administrative authorities
Amendment 138 #
Motion for a resolution Annex I – paragraph 10 – point 22 (22) The adequacy of supervision of litigation funders and third-party funding agreements cannot be ensured absent obligations on litigation funders to be transparent regarding their activities. This includes transparency vis-à-vis courts or administrative authorities
Amendment 139 #
Motion for a resolution Annex I – paragraph 10 – point 23 (23) In proceedings to which a third- party funding agreement applies, the relevant court or administrative authority should assess upon request by a party to the proceedings, or on the own initiative of the court or administrative authority being appointed for judging the case in which a third-party funding agreement is relevant, whether that agreement complies with this Directive and whether claimants and those they represent, including consumers, are protected.
Amendment 14 #
Motion for a resolution Recital A f (new) A f. whereas in this sense TPLF can not only constitute a powerful tool to promote access to justice, but also to ensure appropriate corporate accountability;
Amendment 140 #
Motion for a resolution Annex I – paragraph 10 – point 23 (23) In proceedings to which a third- party funding agreement applies, the relevant court or administrative authority should assess without undue delay and upon request by a party to the proceedings raising justified concerns whether that agreement complies with this Directive and whether claimants and those they represent, including consumers, are protected.
Amendment 141 #
Motion for a resolution Annex I – paragraph 10 – point 23 (23) In proceedings to which a third- party funding agreement applies, the relevant court or administrative authority should
Amendment 142 #
Motion for a resolution Annex I – paragraph 10 – point 24 (24) Litigation funders should establish internal good governance processes to avoid conflicts of interests between the litigation funder and claimants. Compliance with transparency requirements should ensure that claimants are fully aware of any relationship a litigation funder may have with defendants, lawyers, other litigation funders, or any other third party involved in the case, which may create an actual or perceived conflict.
Amendment 143 #
Motion for a resolution Annex I – paragraph 10 – point 25 (25) Litigation funders
Amendment 144 #
Motion for a resolution Annex I – paragraph 10 – point 25 (25) Litigation funders that have a direct interest in the financial outcome of proceedings may be incentivised to claim
Amendment 145 #
Motion for a resolution Annex I – paragraph 10 – point 26 (26) Where third-party funding agreements permit litigation funders to receive a share of any reward or certain fees in priority to any awards allocated to claimants, the available award could be so reduced as to leave little or nothing for claimants. Therefore, the award should always be granted to the claimants first, before that of the funder. Litigation funders should not be permitted to require the prioritisation of their own reward.
Amendment 146 #
Motion for a resolution Annex I – paragraph 10 – point 27 (27) As the share of any reward received by litigation funders can reduce
Amendment 147 #
Motion for a resolution Annex I – paragraph 10 – point 27 (27) As in some Member States the share of any reward received
Amendment 148 #
Motion for a resolution Annex I – paragraph 10 – point 28 (28) Additional conditions should be put in place to ensure that litigation funders do not influence the decisions of claimants in the course of proceedings in a manner that would benefit the litigation funder itself at the expense of the claimant. In particular, litigation funders should not direct or influence decisions on how cases are pursued, which interests are prioritised, or whether or not claimants should accept any particular outcome, award or settlement.
Amendment 149 #
Motion for a resolution Annex I – paragraph 10 – point 28 (28) Additional conditions should be put in place to ensure that litigation funders do not influence the decisions of claimants in the course of proceedings in a manner that would only benefit the litigation funder itself. In particular, litigation funders should not direct or influence decisions on how cases are pursued, which interests are prioritised, or whether or not claimants should accept any particular outcome, award or settlement.
Amendment 15 #
Motion for a resolution Recital A g (new) A g. whereas in some cases bringing a case to court could be a matter of public interest, and the absence of TPLF could lead to public interest cases not being brought to court;
Amendment 150 #
Motion for a resolution Annex I – paragraph 10 – point 28 (28) Additional conditions should be put in place to ensure that litigation funders do not influence the decisions of claimants in the course of proceedings in a manner that would benefit the litigation funder itself. In particular, litigation funders should not
Amendment 151 #
Motion for a resolution Annex I – paragraph 10 – point 29 (29) Litigation funders should not be allowed to withdraw the funding they have agreed to provide, except in limited circumstances as set out in this Directive, so that funding is not withdrawn throughout the whole litigation, to the disadvantage of claimants or intended beneficiaries
Amendment 152 #
Motion for a resolution Annex I – paragraph 10 – point 30 (30) Where commercial litigation funders have instigated, supported or funded proceedings which are not successful, they should be jointly liable with claimants for any adverse costs they caused defendants to incur and that may be awarded by courts or administrative authorities. Courts or administrative authorities should be granted adequate powers to ensure the effectiveness of such an obligation, and third party funding agreements should not exclude responsibility for such adverse costs.
Amendment 153 #
Motion for a resolution Annex I – paragraph 10 – point 30 (30) Where litigation funders have
Amendment 154 #
Motion for a resolution Annex I – paragraph 10 – point 33 (33) The objectives of this Directive, namely to ensure the harmonisation of Member States’ rules applicable to commercial litigation funders and their activities, and thus to en
Amendment 155 #
Motion for a resolution Annex I – paragraph 10 – point 33 (33) The objectives of this Directive, namely to ensure the harmonisation of Member States’ rules applicable to litigation funders and their activities, and thus to ensure that common minimum standards for the protection of the rights of funded claimants and intended beneficiaries in proceedings financed wholly or in part by third-party funding agreements apply in all Member States in which litigation funding is regulated, cannot be sufficiently achieved by the Member States as litigation funders operate in multiple Member States and are subject to different national rules and practices, but can rather, by reason of the scale of the emerging market of third-party litigation funding, the need to avoid diverging rules and practices that are likely to constitute an obstacle to the proper functioning of the internal market and the need to avoid ‘forum shopping’ by litigation funders seeking to optimise national rules, be better achieved at Union level. The Union may thus adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union.
Amendment 156 #
Motion for a resolution Annex I – paragraph 10 – point 33 (33) The objectives of this Directive, namely to ensure the harmonisation of Member States’ rules applicable to litigation funders and their activities, and thus to ensure that common minimum standards for the protection of the rights of funded claimants and intended beneficiaries in proceedings financed wholly or in part by third-party funding agreements apply in all Member States, cannot be sufficiently achieved by the Member States as litigation funders operate in multiple Member States and are subject to different national rules and practices, but can rather be better achieved at Union level, by reason of the scale of the emerging market of third-party litigation funding, the need to avoid diverging rules and practices that are likely to constitute an obstacle to the proper functioning of the internal market and the need to avoid ‘forum shopping’ by litigation funders seeking to optimise national rules
Amendment 157 #
Motion for a resolution Article 1 – paragraph 1 This Directive is aimed at
Amendment 158 #
Motion for a resolution Article 1 – paragraph 1 This Directive is aimed at harmonising the rules of Member States applicable to third- party litigation funders (‘litigation funders’) and their authorised activities,
Amendment 159 #
Motion for a resolution Article 1 – paragraph 1 This Directive is aimed at harmonising the rules of Member States applicable to commercial third-
Amendment 16 #
Motion for a resolution Recital B B. whereas litigation funders involved in legal proceedings act in their own economic interest
Amendment 160 #
Motion for a resolution Article 1 – paragraph 1 This Directive is aimed at harmonising the rules of Member States applicable to third- party litigation funders (‘litigation funders’) and their authorised activities, and also at protecting funded claimants and intended beneficiaries, including where relevant those whose interests are represented by qualified entities, in proceedings financed wholly or in part by third-party litigation funding. It prohibits third-party funding of investment arbitration proceedings. It lays down safeguards to prevent conflicts of interest, abusive litigation as well as the disproportionate allocation of monetary awards to litigation funders.
Amendment 161 #
Motion for a resolution Article 2 – paragraph 1 This Directive applies to third party litigation funders and to
Amendment 162 #
Motion for a resolution Article 2 – paragraph 1 This Directive applies to commercial third party litigation funders and to the third- party funding agreements that they are entitled to offer to claimants in the Union.
Amendment 163 #
Motion for a resolution Article 2 – paragraph 1 a (new) This Directive is without prejudice to existing Union and national rules establishing a legal framework for mechanisms for collective redress offered by non-profit-making entities qualified for representative actions.
Amendment 164 #
Motion for a resolution Article 2 – paragraph 1 b (new) This Directive regulates recuperation of costs by a commercial undertaking that form part of the compensation or damages awarded by a court in civil litigation to a claimant other than the litigation funder. It does not apply to any other proceedings, in particular not to litigation that seeks to protect a public interest, rather than seeking to compensate harm to an individual.
Amendment 165 #
Motion for a resolution Article 3 – paragraph 1 – point a (a) ‘litigation funder’ means any commercial undertaking that enters into a commercial third-party funding agreement in relation to proceedings, even though it is neither a party to those proceedings, a l
Amendment 166 #
Motion for a resolution Article 3 – paragraph 1 – point a (a) ‘litigation funder’ means any undertaking that enters into a third-party funding agreement in relation to proceedings, even though it is neither a party to those proceedings, a l
Amendment 167 #
Motion for a resolution Article 3 – paragraph 1 – point a a (new) (a a) 'public interest litigation funder' means litigation funders dedicated to the funding of litigations of public interest, or to the funding of public interest litigation on a case-by-case basis.
Amendment 168 #
Motion for a resolution Article 3 – paragraph 1 – point b (b) ‘claimant’ means any natural or legal person who brings or intends to bring proceedings against another party before a court or administrative authority in order to obtain compensation or damages in the form of a monetary award;
Amendment 169 #
Motion for a resolution Article 3 – paragraph 1 – point b a (new) (b a) ‘commercial undertaking’ means any for-profit, private entity engaged in an economic activity, regardless of its legal status and the way in which it is financed;
Amendment 17 #
Motion for a resolution Recital B B. whereas litigation funders involved in legal proceedings
Amendment 170 #
Motion for a resolution Article 3 – paragraph 1 – point c (c) ‘court or administrative authority’ means a competent court, administrative authority, arbitral body or other body tasked with adjudicating on proceedings, according to national law;
Amendment 171 #
Motion for a resolution Article 3 – paragraph 1 – point d (d) ‘intended beneficiary’ means a person who is entitled to
Amendment 172 #
Motion for a resolution Article 3 – paragraph 1 – point e (e) ‘‘proceedings’ means any domestic or cross border civil or commercial litigation, or any voluntary arbitration procedure or alternative dispute resolution mechanism, through which
Amendment 173 #
Motion for a resolution Article 3 – paragraph 1 – point e a (new) (e a) 'public interest litigation' means proceedings aiming to protect or enforce human rights, workers' rights, consumer rights or the environment;
Amendment 174 #
Motion for a resolution Article 3 – paragraph 1 – point e b (new) (e b) 'investment arbitration proceedings' means proceedings initiated by investors against States on the basis of an investment protection agreement;
Amendment 175 #
Motion for a resolution Article 3 – paragraph 1 – point f (f) ‘qualified entity’ means an organisation representing consumers’ interests and designated as qualified entity under Directive (EU) 2020/1828;
Amendment 176 #
Motion for a resolution Article 3 – paragraph 1 – point g (g) ‘supervisory authority’ means a public authority designated by a Member State to be responsible for granting, suspending or withdrawing the authorisation for litigation funders, and for supervising the activities of litigation funders;
Amendment 177 #
Motion for a resolution Article 3 – paragraph 1 – point h (h) ‘third-party funding agreement’
Amendment 178 #
Motion for a resolution Article 3 – paragraph 1 – point h (h) ‘third-party funding agreement’ means an agreement in which a litigation funder agrees to fund
Amendment 179 #
Motion for a resolution Article 4 – point 1 Amendment 18 #
Motion for a resolution Recital B B. whereas commercial litigation funders involved in legal proceedings mostly act in their own economic interest, rather than in the interest of claimants or the general interest; whereas they can seek to control the litigation and demand an outcome that pays them the greatest return3 ; _________________ 3 The Australian Parliament concluded “the level of power and influence litigation funders have in class actions gives rise to situations where their financial interests
Amendment 180 #
Motion for a resolution Article 4 – point 1 1. Member States may determine in accordance with national law whether third party funding agreements can be offered in relation to legal or arbitration proceedings within their Member State, or for the benefit of claimants or intended beneficiaries resident within their Member State.
Amendment 181 #
Motion for a resolution Article 4 – point 1 a (new) 1 a. Members States shall not authorise third-party funding for investment arbitration proceedings.
Amendment 182 #
Motion for a resolution Article 4 – point 2 2.
Amendment 183 #
Motion for a resolution Article 4 – point 2 2. Where such activities are permitted, Member States shall create a system for the authorisation of the activities of litigation funders within their Member State. That system shall include de
Amendment 184 #
Motion for a resolution Article 4 – point 2 2. Where such activities are permitted, Member States shall create a system for the authorisation and monitoring of the activities of litigation funders within their Member State. That system shall include designating an independent supervisory authority tasked with granting, suspending or withdrawing authorisations for litigation funders and supervising the activities of litigation funders.
Amendment 185 #
Motion for a resolution Article 4 – point 2 a (new) 2 a. Member States shall facilitate the authorisation of third-party funding for public interest litigation. They shall provide support for litigation funders and claimants engaging in proceedings with the aim to protect human rights, workers' rights, consumer rights and the environment.
Amendment 186 #
Motion for a resolution Article 5 – point 1 – introductory part 1. Member States shall ensure that supervisory authorities only grant or maintain authorisations, whether for domestic or cross-border litigation or other proceedings, to litigation funders who either do not obtain more than 10% of the final compensation or damages awarded or which comply with the provisions of this Directive, and who meet, in addition to any suitability or other criteria as may be set out in national law, at least the following criteria:
Amendment 187 #
Motion for a resolution Article 5 – point 1 – introductory part 1. Member States shall ensure that supervisory authorities only grant or maintain authorisations, whether for domestic or cross-border litigation
Amendment 188 #
(a) they
Amendment 189 #
Motion for a resolution Article 5 – point 1 – point c (c) they demonstrate to the satisfaction of the supervisory authority that they have procedures and governance structures in place to ensure their ongoing compliance with this Directive, with the transparency requirements and fiduciary relationships this Directive provides for
Amendment 19 #
Motion for a resolution Recital B B. whereas litigation funders involved in legal proceedings act in their own economic interest, rather than in the interest of claimants; whereas they
Amendment 190 #
Motion for a resolution Article 5 – point 1 – point c (c) they demonstrate to the satisfaction of the supervisory authority that they have procedures and governance structures in place to ensure their ongoing compliance with this Directive, with the transparency
Amendment 191 #
Motion for a resolution Article 5 – point 1 a (new) 1 a. Member States shall mutually recognise authorisation given to a litigation funder in another Member State and therefore automatically allow them to operate in their Member State, for as long as the initial authorisation continues to exist.
Amendment 192 #
Motion for a resolution Article 5 – point 1 a (new) 1 a. Member States shall ensure that supervisory authorities provide support for public interest litigation funders to comply with the conditions for authorisation.
Amendment 193 #
Motion for a resolution Article 5 – point 1 b (new) 1 b. Members States should ensure that supervisory authorities do not withdraw authorisations of public interest litigation funders that do not fulfil the conditions of authorisations without granting a sufficient period of time for them to take necessary actions in order to be in compliance with this Directive.
Amendment 194 #
Motion for a resolution Article 5 – point 1 c (new) 1 c. Members States shall ensure that supervisory authorities do not withdraw authorisations of public interest litigation funders if it affects the rights of current of potential claimants to engage in public interest litigation.
Amendment 195 #
Motion for a resolution Article 5 – point 2 Amendment 196 #
Motion for a resolution Article 6 – point 1 – point c Amendment 197 #
Motion for a resolution Article 6 – point 1 a (new) 1 a. Litigation funders may demonstrate that they meet the criteria set out in paragraph 1 by reference to insurance that would fully cover these costs, if necessary.
Amendment 198 #
Motion for a resolution Article 6 – point 2 2. Member States shall
Amendment 199 #
Motion for a resolution Article 6 – point 2 2. Member States shall ensure that supervisory authorities are empowered to verify whether litigation funders would be able to maintain access at all times to the minimum liquidity required to pay in full all foreseeable adverse costs in all proceedings they have funded. Members States shall ensure that their courts or administrative authorities can request litigation funders to provide security for costs in the forms admitted by national law
Amendment 2 #
Motion for a resolution Citation 1 b (new) — – having regard to Article 9 of the UNECE Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters,
Amendment 20 #
Motion for a resolution Recital B a (new) B a. whereas, while TPLF is quasi- inexistant in Europe, it is a booming phenomenon in investment arbitration that multiplies the number and the volume of claims of private investors against States;
Amendment 200 #
Motion for a resolution Article 6 – point 2 2. Member States shall ensure that supervisory authorities are empowered to verify whether litigation funders would be able to maintain access at all times to the minimum liquidity required to pay in full all foreseeable adverse costs in all proceedings they have funded. Members States shall ensure that their courts or administrative authorities can request litigation funders to provide security for costs in the forms admitted by national law, should a
Amendment 201 #
Motion for a resolution Article 6 – point 2 2. Member States shall ensure that supervisory authorities are empowered to verify whether litigation funders would be able to maintain access at all times to the minimum liquidity required to pay in full all foreseeable adverse costs in all proceedings they have funded. Members States shall ensure that their courts or administrative authorities can request litigation funders to provide security for costs in the forms admitted by national law,
Amendment 202 #
Motion for a resolution Article 6 – point 2 a (new) 2 a. Member States shall set up a specific insurance fund to cover all the outstanding costs of claimants that engaged in litigation in good faith, in case a litigation funder becomes insolvent in the course of the litigation procedure. This fund shall be publicly managed and financed through annual fees payable by authorised litigation funders.
Amendment 203 #
Motion for a resolution Article 6 – point 2 b (new) 2 b. Authorised litigation funders shall annually report on their solvency status to the competent supervisory authority.
Amendment 204 #
Motion for a resolution Article 7 – point -1 (new) Amendment 205 #
Motion for a resolution Article 7 – point 1 Amendment 206 #
Motion for a resolution Article 7 – paragraph 1 (new) Third-party litigation funders shall observe a fiduciary duty of care, requiring them to act in the best interests of a claimant.
Amendment 207 #
Motion for a resolution Article 7 – point 2 2. Where a claimant intends to take a claim on behalf of others in proceedings, such as where the claimant is a qualified entity representing consumers, the litigation funder shall also be required to owe a fiduciary duty to such intended beneficiaries. Litigation funders shall be obliged to acting in a manner that is consistent with their fiduciary duty throughout the course of proceedings. In the event of a conflict between the interests of the litigation funder and those of claimants or intended beneficiaries, the litigation funder shall commit to placing the interests of the claimants or intended beneficiaries above its own interests. During a litigation procedure, the defendant cannot submit a complaint against a litigation funder who is funding the ongoing case against them.
Amendment 208 #
Motion for a resolution Article 7 – point 2 2. Where a claimant intends to take a claim on behalf of others in proceedings, such as where the claimant is a qualified entity representing consumers, the litigation funder shall
Amendment 209 #
Motion for a resolution Article 8 – point 1 1.
Amendment 21 #
Motion for a resolution Recital B b (new) B b. whereas the increased recourse by investors to investment arbitration has a detrimental regulatory chilling effect on States and, in particular, deters States from enacting new social and environmental protection norms;
Amendment 210 #
Motion for a resolution Article 8 – point 2 Amendment 211 #
Motion for a resolution Article 8 – point 2 2. Member States shall ensure that a complaints procedure before supervisory authorities is available for any natural or legal person who wishes to raise concerns regarding the compliance of a litigation funder with its obligations under this Directive and the applicable national law. Concerns raised by defendants in a case involving the litigation funder shall not be receivable.
Amendment 212 #
Motion for a resolution Article 8 – point 2 2. Member States shall ensure that a complaint
Amendment 213 #
Motion for a resolution Article 8 – point 3 – point b (b) take any decisions necessary to grant or deny authorisation to any applicant litigation funder, to withdraw any authorisation, or to impose any conditions, restrictions or penalt
Amendment 214 #
Motion for a resolution Article 8 – point 3 – point c Amendment 215 #
Motion for a resolution Article 8 – point 3 – point c (c) decide on the suitability and fitness of a litigation funder including by reference to their experience, reputation,
Amendment 216 #
Motion for a resolution Article 8 – point 3 – point e (e) assess at least every year whether an authorised litigation funder continues to comply with the criteria for authorisation referred to in Article 5(1) and ensure that such authorisation is withdrawn if it no longer complies with one or more of those criteria. Before withdrawing the authorisation of a public interest litigation funder, it shall also refrain from withdrawing the authorisation if this would affect current or potential claimants' capacity to engage in public interest litigation.
Amendment 217 #
Motion for a resolution Article 8 – point 3 – point e (e) assess at least every year whether an authorised litigation funder continues to comply with the criteria for authorisation referred to in Article 5(1) and ensure that such authorisation is withdrawn if it no longer complies with one or more of those criteria. Before withdrawing the authorisation of a public interest litigation funder, it shall grant it sufficient time to take the necessary steps in order to comply with the requirements of this Directive.
Amendment 218 #
Motion for a resolution Article 8 – point 3 – point e (e) assess at least every year whether an authorised litigation funder continues to comply with the criteria for authorisation referred to in Article 5(1) and ensure that such authorisation is suspended or withdrawn if it no longer complies with one or more of those criteria. Such a suspension or withdrawal shall not affect the rights of the claimants and beneficiaries of the proceedings in which the funder may be involved.
Amendment 219 #
Motion for a resolution Article 8 – point 3 – point e (e) assess
Amendment 22 #
Motion for a resolution Recital B c (new) B c. whereas by multiplying the number and the amount of investment arbitration claims against States, TPLF multiplies the already heavy financial burden that investment arbitration claims, whether successful or not, represent for States;
Amendment 220 #
Motion for a resolution Article 8 – point 3 – point f Amendment 221 #
Motion for a resolution Article 8 – point 4 4. Member States shall ensure that litigation funders are required to notify a supervisory authority without undue delay of any changes affecting compliance by a litigation funder with the capital adequacy requirements laid down in Article 6 paragraphs 1 and 2.
Amendment 222 #
Motion for a resolution Article 8 – point 4 4. Member States shall ensure that litigation funders are required to notify a supervisory authority
Amendment 223 #
Motion for a resolution Article 8 – point 5 5. Member States shall ensure that supervisory authorities oversee fiduciary relationships between litigation funders and claimants and intended beneficiaries in general
Amendment 224 #
Investigations
Amendment 225 #
Motion for a resolution Article 9 – point 1 Amendment 226 #
Motion for a resolution Article 9 – point 1 1. Member States shall ensure that a complaint
Amendment 227 #
Motion for a resolution Article 9 – point 2 Amendment 228 #
Motion for a resolution Article 9 – point 2 2.
Amendment 229 #
Motion for a resolution Article 9 – point 2 2. Under the complaints system referred to in paragraph 1, Member States shall ensure that supervisory authorities are empowered to assess without undue delay whether a litigation funder is in compliance with any obligations or conditions associated with its authorisation, with the provisions of this Directive and with any other applicable requirements under national law.
Amendment 23 #
Motion for a resolution Recital C C. whereas
Amendment 230 #
Motion for a resolution Article 9 – point 2 2. Under the complaint
Amendment 231 #
Motion for a resolution Article 9 – point 3 – introductory part 3. Member States shall ensure that, in exercising their oversight with litigation funders’ compliance with such obligations, supervisory authorities
Amendment 232 #
Motion for a resolution Article 9 – point 3 – point i Amendment 233 #
Motion for a resolution Article 9 – point 3 – point iv (iv) initiate investigations following a recommendation from a court or administrative authority that has concerns regarding a litigation funder’s compliance with such obligations arising from any proceedings before such a court or administrative authority, prior to any court action or during the proceedings.
Amendment 234 #
Motion for a resolution Article 10 – point 2 2. The Commission shall
Amendment 235 #
Motion for a resolution Article 10 – point 2 2. The Commission shall oversee and coordinate the activities of the supervisory authorities in performing the functions set out in this Directive, and shall convene and chair a network of supervisory authorities.
Amendment 236 #
Motion for a resolution Article 10 – point 3 3. The
Amendment 237 #
Motion for a resolution Article 10 – point 3 3.
Amendment 238 #
Motion for a resolution Article 10 – point 4 4. Each supervisory authority shall communicate
Amendment 239 #
Motion for a resolution Article 10 – point 4 4. Each supervisory authority shall communicate every
Amendment 24 #
Motion for a resolution Recital C C. whereas, according to the scarcely available data, litigation funders
Amendment 240 #
Motion for a resolution Article 10 – point 5 Amendment 241 #
Motion for a resolution Article 10 – point 5 5. Each
Amendment 242 #
Motion for a resolution Article 10 – point 6 Amendment 243 #
Motion for a resolution Article 10 – point 6 6. Where a litigation funder has sought authorisation from a supervisory authority, and subsequently seeks authorisation from another, such supervisory authorities shall coordinate and share information to the extent appropriate, with a view to taking consistent decisions, with due regard to diverging national rules.
Amendment 244 #
Motion for a resolution Article 10 – point 7 Amendment 245 #
Motion for a resolution Article 10 – point 7 7. Where a litigation funder is authorised by a supervisory authority in a Member State, but wishes to offer a third party funding agreement for the benefit of a claimant or other intended beneficiary in another Member State, or for proceedings in another Member State it shall
Amendment 246 #
Motion for a resolution Article 11 – paragraph 1 – introductory part Amendment 247 #
Motion for a resolution Article 11 – paragraph 1 – introductory part Member States shall ensure that third party funding agreements are required to be provided in writ
Amendment 248 #
Motion for a resolution Article 11 – paragraph 1 – introductory part Member States shall ensure that third party funding agreements are required to be written in one or more of the official languages of the
Amendment 249 #
Motion for a resolution Article 11 – paragraph 1 – point -a (new) -a. the different costs and expenses that the litigation funder will cover;
Amendment 25 #
Motion for a resolution Recital C a (new) Ca. whereas it is essential to consider the fairness of the financial outcome for the funded plaintiff so as to avoid the risk that injured plaintiffs receive little or nothing in the way of damages;
Amendment 250 #
Motion for a resolution Article 11 – paragraph 1 – point a a. the share of any award or fees that will be paid to the litigation funder
Amendment 251 #
Motion for a resolution Article 11 – paragraph 1 – point a a. the share of any award or fees that will be paid to the litigation funder or any other third party, or any other financial costs borne by the claimants and /or intended beneficiaries directly or indirectly
Amendment 252 #
a a. a reference to the responsibility of the litigation funder as regards adverse costs, in accordance with Article 17 of this Directive.
Amendment 253 #
Motion for a resolution Article 11 – paragraph 1 – point a b (new) a b. a clause specifying that the award will be granted first to the claimants, before the fee is payed to the funder;
Amendment 254 #
Motion for a resolution Article 11 – paragraph 1 – point b – introductory part b. the
Amendment 255 #
Motion for a resolution Article 11 – paragraph 1 – point b – introductory part b.
Amendment 256 #
Motion for a resolution Article 11 – paragraph 1 – point b – point i Amendment 257 #
Motion for a resolution Article 11 – paragraph 1 – point b – point i Amendment 258 #
Motion for a resolution Article 11 – paragraph 1 – point b – point i Amendment 259 #
Motion for a resolution Article 11 – paragraph 1 – point b – point ii Amendment 26 #
Motion for a resolution Recital C a (new) C a. whereas in several Member States, such as Austria and the Netherlands, the fee to the litigation funder is paid on top of the damage award, therefore ensuring that claimants receive the full amount of compensation that they are entitled to;
Amendment 260 #
Motion for a resolution Article 11 – paragraph 1 – point b – point ii Amendment 261 #
Motion for a resolution Article 11 – paragraph 1 – point b – point iii Amendment 262 #
Motion for a resolution Article 11 – paragraph 1 – point b – point iii iii. the strictly defined circumstances in which the third party funding agreement can be terminated and the risks to claimants and/or beneficiaries in that scenario, and
Amendment 263 #
Motion for a resolution Article 11 – paragraph 1 – point b – point iv Amendment 264 #
Motion for a resolution Article 11 – paragraph 1 – point b – point iv Amendment 265 #
Motion for a resolution Article 11 – paragraph 1 – point b a (new) b a. All other relevant elements that need to be included in possibly related service agreements, including, where relevant, financial service agreements in particular, under Union and national law.
Amendment 266 #
Motion for a resolution Article 11 – paragraph 1 – point b a (new) b a. a disclaimer with regard to non- conditionality of funding with regard to procedural steps;
Amendment 267 #
Motion for a resolution Article 11 – paragraph 1 – point b b (new) b b. a clause stating that any share of the award for the funder can only be considered after the award of the claimant has been satisfied and is, in any case, limited to a maximum of 40% of the gross settlement or damages claimed;
Amendment 268 #
Motion for a resolution Article 12 – point 1 1. Member States shall require litigation funders to establish a policy and to implement internal processes for the avoidance and resolution of conflicts of interest. Th
Amendment 269 #
Motion for a resolution Article 12 – point 2 – introductory part 2. Member States shall require litigation funders to disclose to a claimant and intended beneficiaries in the third- party funding agreement and the supervisory authority all information that may reasonably be perceived as having the potential to give rise to a conflict of interest. Required disclosures shall include at least the following:
Amendment 27 #
Motion for a resolution Recital C b (new) C b. whereas rules should be introduced to ensure that the award is granted first to the claimants, before the fee is payed to the litigation funder;
Amendment 270 #
Motion for a resolution Article 12 – point 2 – point a (a) details of any arrangements that exist, financial or otherwise, between the litigation funder and any other undertaking that relates to the proceedings, including any arrangements with
Amendment 271 #
Motion for a resolution Article 12 – point 2 – point b Amendment 272 #
Motion for a resolution Article 12 – point 2 – point b Amendment 273 #
Motion for a resolution Article 12 – point 2 – point c (c) details of any relevant connection between the litigation funder and a defendant in the proceedings, in particular related to any competitive situations.
Amendment 274 #
Motion for a resolution Article 13 – point 1 1. Member States shall ensure that third-party funding agreements concluded with natural or legal persons who are not authorised to act as a litigation funder have no legal effect.
Amendment 275 #
Motion for a resolution Article 13 – point 2 – introductory part 2. Member States shall ensure that third-party funders are not permitted to unduly influence, control or overrule the decisions of a claimant in the course of proceedings. To this end,
Amendment 276 #
Motion for a resolution Article 13 – point 2 – point a (a) the grant of an explicit power to a litigation funder to take or
Amendment 277 #
Motion for a resolution Article 13 – point 2 – point b Amendment 278 #
Motion for a resolution Article 13 – point 3 a (new) 3 a. As the share of the compensation or damages payable to the litigation funder can be considered as an additional legal or procedural cost for the claimant, the competent court or administrative authority shall be allowed to decide to consider this as an additional charge to be compensated by the defendant in case the latter loses the case.
Amendment 279 #
Motion for a resolution Article 13 – point 4 4. Absent exceptional circumstances, where a litigation funding agreement would entitle a litigation funder to a share of any award that would dilute the share available to the claimant and the intended beneficiaries to
Amendment 28 #
Motion for a resolution Recital D D. whereas
Amendment 280 #
Motion for a resolution Article 13 – point 5 a (new) 5 a. Member States shall ensure that third-party funding agreements must be unconditional to the withdrawal of funding under certain procedural circumstances.
Amendment 281 #
Motion for a resolution Article 13 – point 6 6. Claimants and intended beneficiaries shall be indemnified in respect of any losses caused by a litigation funder that entered into a third-party funding agreement which is found to be invalid. The rights of the claimants and of the intended beneficiaries of the proceedings shall not be affected.
Amendment 282 #
Motion for a resolution Article 13 – point 6 a (new) 6 a. Members States shall make sure that the annulment of a third-party funding agreement does not affect claimants' capacity to initiate or continue litigations of public interests. In ongoing cases of litigations of public interest, Member States shall in particular provide legal aid as a replacement for third-party funds in order to allow claimants to sustain their claim.
Amendment 283 #
Motion for a resolution Article 14 – point 1 1. Member States shall prohibit the unilateral termination of a third-party funding agreement by a litigation funder without the claimant’s informed consent, except where a court or administrative authority has granted the litigation funder permission to terminate the agreement, having considered whether the interests of the claimant and intended beneficiaries would be adequately protected despite the termination.
Amendment 284 #
Motion for a resolution Article 14 – point 2 Amendment 285 #
Motion for a resolution Article 15 – point 1 1. Member States shall ensure that claimants or their representatives are required to provide a complete and unredacted copy of any third-party funding agreements relating to the proceedings concerned to the relevant court or administrative authority at the earliest stage of those proceedings. Member States shall ensure that defendants are made aware of the existence of a third-party funding agreement, and of the identity of the litigation funder.
Amendment 286 #
Motion for a resolution Article 15 – point 1 1. Member States shall ensure that
Amendment 287 #
Motion for a resolution Article 15 – point 2 Amendment 288 #
Motion for a resolution Article 15 – point 2 Amendment 289 #
Motion for a resolution Article 15 – point 2 Amendment 29 #
Motion for a resolution Recital D D. whereas
Amendment 290 #
Motion for a resolution Article 15 – point 2 2. Member States shall ensure that courts or administrative authorities are empowered to review the third-party funding agreement in accordance with Article 16, upon request by a party to the proceedings, where that party has justified doubts in respect of the compliance of such third party funding agreement with this Directive and any other applicable national law
Amendment 291 #
Motion for a resolution Article 15 – point 3 Amendment 292 #
Motion for a resolution Article 15 – point 3 Amendment 293 #
Motion for a resolution Article 15 – point 3 Amendment 294 #
Motion for a resolution Article 15 – point 3 Amendment 295 #
Motion for a resolution Article 16 – paragraph 1 – introductory part Member States shall designate the competent court or administrative authority to perform the different judicial and administrative tasks under this Directive.
Amendment 296 #
Motion for a resolution Article 16 – paragraph 1 – introductory part Member States shall designate the competent court or administrative authority to perform the different judicial and administrative tasks under this Directive. Such designation shall in particular specify
Amendment 297 #
Motion for a resolution Article 16 – paragraph 1 – point a Amendment 298 #
Motion for a resolution Article 16 – paragraph 1 – point a (a) to make orders or give directions that are binding on a litigation funder, such as requiring the litigation funder to provide the funding as agreed in the relevant third- party funding agreement or requiring the litigation funder to make changes in respect of the relevant funding
Amendment 299 #
Motion for a resolution Article 16 – paragraph 1 – point a (a) to make orders or give directions that are binding on a litigation funder, such
Amendment 3 #
Motion for a resolution Recital -A (new) -A. Whereas Member States have a primary responsibility to make adequate legal aid available to those who lack sufficient resources in view of ensuring access to justice for all, in line with article 47 of the Charter of Fundamental Rights of the European Union;
Amendment 30 #
Motion for a resolution Recital D D. whereas litigation funders seem to
Amendment 300 #
Motion for a resolution Article 16 – paragraph 1 – point b Amendment 301 #
Motion for a resolution Article 16 – paragraph 1 – point b (b) to assess the compliance of each third-party funding agreement with the
Amendment 302 #
Motion for a resolution Article 16 – paragraph 1 – point c Amendment 303 #
Motion for a resolution Article 16 – paragraph 1 – point c (c) to evaluate the suitability of each third-party funding agreement with respect to the transparency requirements under Article 12
Amendment 304 #
Motion for a resolution Article 16 – paragraph 1 – point c (c) to evaluate the suitability of each third-party funding agreement with respect to the transparency requirements under Article 12, taking in particular into account the level of clarity and transparency of the third-party funding agreement, and the degree to which any risks and benefits were presented to and knowingly undertaken by
Amendment 305 #
Motion for a resolution Article 16 – paragraph 1 – point d Amendment 306 #
Motion for a resolution Article 16 – paragraph 1 – point d – introductory part (d) to assess whether a third-party funding agreement entitles a litigation funder to an unfair, disproportionate or unreasonable share of any award as described in Article 13(4), and to annul or adjust such agreements accordingly. Member States shall specify that in making such an assessment, competent courts or administrative authorities may take into consideration the characteristics and circumstances of the intended or ongoing proceedings including, as appropriate:
Amendment 307 #
Motion for a resolution Article 16 – paragraph 1 – point d – point i Amendment 308 #
Motion for a resolution Article 16 – paragraph 1 – point d – point ii Amendment 309 #
Motion for a resolution Article 16 – paragraph 1 – point d – point iii Amendment 31 #
Motion for a resolution Recital D a (new) D a. whereas in the absence of sufficient public legal aid, civil society organisations have turned to TPLF to be able to litigate with the aim of protecting human rights, workers’ rights, consumer rights and the environment;
Amendment 310 #
Motion for a resolution Article 16 – paragraph 1 – point d – point iv Amendment 311 #
Motion for a resolution Article 16 – paragraph 1 – point e Amendment 312 #
Motion for a resolution Article 16 – paragraph 1 – point f Amendment 313 #
Motion for a resolution Article 16 – paragraph 1 – point f (f) to consult or seek expertise from persons with appropriate knowledge and independence to assist in the performance of the court’s or administrative authority’s assessment powers, including from any suitably qualified expert or from supervisory authorities.
Amendment 314 #
Motion for a resolution Article 16 a (new) Article 16 a Qualification of the share of the compensation or damages As the share of compensation or damages payable to the litigation funder can be considered as an additional legal or procedural cost for the claimant, the competent court or administrative authority shall be allowed to decide to consider this as an additional charge to be compensated by the defendant in case the latter loses the case.
Amendment 315 #
Motion for a resolution Article 17 Amendment 316 #
Motion for a resolution Article 17 – point 1 Amendment 317 #
Motion for a resolution Article 17 – point 1 – introductory part 1.
Amendment 318 #
Motion for a resolution Article 17 – point 1 – point a Amendment 319 #
Motion for a resolution Article 17 – point 1 – point b Amendment 32 #
Motion for a resolution Recital D b (new) D b. whereas TPLF aiming at protecting human rights, workers’ rights, consumer rights and the environment should not be subject to the same regulations as TPLF for the sole prospect of economic gains;
Amendment 320 #
Motion for a resolution Article 17 – point 1 – point c Amendment 321 #
Motion for a resolution Article 17 – point 1 – point d Amendment 322 #
Motion for a resolution Article 19 – point 1 1. No later than [...] years after the date of application of this Directive], the Commission shall carry out an evaluation of this Directive and present a report on the main findings to the European Parliament, the Council and the European Economic and Social Committee. The evaluation shall be conducted in accordance with the Commission’s better regulation guidelines. In the report, the Commission shall in particular assess the effectiveness of the
Amendment 323 #
Motion for a resolution Article 19 – point 2 Amendment 324 #
Motion for a resolution Article 19 – point 2 – point a Amendment 325 #
Motion for a resolution Article 19 – point 2 – point b Amendment 326 #
Motion for a resolution Article 19 – point 2 – point c Amendment 327 #
Amendment 33 #
Motion for a resolution Recital D c (new) D c. whereas public legal aid and public prosecution are and must remain the central mechanisms to guarantee the fundamental right to an effective remedy and to a fair trial; whereas Article 47 of the Charter of Fundamental Rights of the European Union explicitly states that 'legal aid shall be made available to those who lack sufficient resources in so far as such aid is necessary to ensure effective access to justice'.
Amendment 34 #
Motion for a resolution Recital E Amendment 35 #
Motion for a resolution Recital E E. whereas, although TPLF is widespread
Amendment 36 #
Motion for a resolution Recital E E. whereas
Amendment 37 #
Motion for a resolution Recital F F. whereas
Amendment 38 #
Motion for a resolution Recital F F. whereas the number of litigation funders is
Amendment 39 #
Motion for a resolution Recital G Amendment 4 #
Motion for a resolution Recital -A a (new) -A a. whereas third party litigation funding (TPLF) could be used as a tool to support access to justice, if properly regulated, including by introducing safeguards to protect claimants and filter out ill-intentioned and overly speculative funders;
Amendment 40 #
Motion for a resolution Recital G G. whereas the current regulatory vacuum enables litigation funders to operate in secrecy, with the result that courts can, on occasion, make awards to claimants without realising that a large majority of the award will subsequently be redirected to litigation funders at the expense of claimants; whereas the lack of transparency can also mean that even the potential beneficiaries have little or no knowledge about the distribution of awards or the funding agreements, in particular in Members States with an opt-
Amendment 41 #
Motion for a resolution Recital G G. whereas the current regulatory vacuum enables litigation funders to operate in secrecy, with the result that courts can, on occasion, make awards to claimants without realising that a large majority of the award will subsequently be redirected to litigation funders; whereas the lack of transparency can also mean that even the potential beneficiaries have little or no knowledge about the distribution of awards or the funding agreements, in particular in Members States with an opt-
Amendment 42 #
Motion for a resolution Recital G G. whereas the current regulatory vacuum enables litigation funders to operate in
Amendment 43 #
Motion for a resolution Recital H H. whereas Directive (EU) 2020/1828 identifies certain safeguards relating to litigation funding, which are, however, limited to representative actions on behalf of consumers taken under that Directive, and therefore exclude many other types of action
Amendment 44 #
Motion for a resolution Recital H H. whereas Directive (EU) 2020/1828 identifies certain opportunities and safeguards relating to litigation funding, which are,
Amendment 45 #
Motion for a resolution Recital H H. whereas Directive (EU) 2020/1828
Amendment 46 #
Motion for a resolution Recital H a (new) H a. whereas all Member States are party to the Aarhus Convention and therefore also specifically obliged to provide adequate and effective remedies with regard to environmental claims, in line with article 9(4) of this Convention. To this end, all judicial and administrative procedures should be fair, equitable, timely and not prohibitively expensive.
Amendment 47 #
Motion for a resolution Recital H a (new) H a. whereas TPLF should be subject to existing applicable rules on financial services; whereas any additional regulation of TPLF should not undermine the existing protection granted to beneficiaries of this financial service;
Amendment 48 #
Motion for a resolution Paragraph 1 1.
Amendment 49 #
Motion for a resolution Paragraph 1 1. Observes that third party litigation funding is a rapidly expanding commercial practice in the Union, which
Amendment 5 #
Motion for a resolution Recital A A. whereas third party litigation funding (TPLF) is a growing practice in countries such as Australia, the USA, Canada, the United Kingdom and, more recently, certain EU Member States, whereby commercial investors (‘litigation funders’) who are not a party to a dispute invest in legal proceedings and pay legal and other expenses, in exchange for a share of any eventual award or settlement received by the funded applicant; whereas TPLF does not only occur in collective redress cases but also in individual cases, especially arbitration and insolvency proceedings;
Amendment 50 #
Motion for a resolution Paragraph 1 1. Observes that third party litigation funding is a rapidly expanding commercial practice in the Union, which has a
Amendment 51 #
Motion for a resolution Paragraph 1 a (new) 1 a. Underlines that this practice develops especially in countries where access to justice is limited because of extremely high legal costs and welcomes whereby that it can constitute the only way for citizens and consumers to obtain redress and ensure corporate accountability; notes, however, that regulating TPLF should go hand in hand with policies enhancing access to justice by lowering legal costs, by providing adequate public funding to consumer organisations and civil society organisations, or by promoting other practices such as legal aid or crowdfunding; calls on Member States to exchange best practices on this matter and to draw from the solutions provided in Article 20 of Directive (EU) 2020/1828 when it comes to ensuring effective access to justice;
Amendment 52 #
Motion for a resolution Paragraph 2 2. Firmly believes that in order to ensure that justice systems prioritise redress for victims of injustice, and not the interests of private investors who may only seek commercial opportunit
Amendment 53 #
Motion for a resolution Paragraph 2 2. Firmly believes that in order to ensure that justice systems prioritise the interests of injured parties, redress for victims of injustice, and not the interests of investors who may seek commercial opportunity from disputes, a harmonised regulatory regime addressing key issues relevant to litigation funding, including transparency, fairness, and proportionality, is necessary;
Amendment 54 #
Motion for a resolution Paragraph 2 2.
Amendment 55 #
Motion for a resolution Paragraph 2 2.
Amendment 56 #
Motion for a resolution Paragraph 2 a (new) 2 a. Stresses that such an initiative must be without prejudice to existing Union and national rules establishing a legal framework for mechanisms for collective redress offered by non-profit- making entities qualified for representative actions, as well as to any other public interest litigation, including but not limited to litigation that falls under Article 9 of the Aarhus Convention;
Amendment 57 #
Motion for a resolution Paragraph 3 3.
Amendment 58 #
Motion for a resolution Paragraph 3 3.
Amendment 59 #
Motion for a resolution Paragraph 3 a (new) 3 a. Firmly believes that third party funding of investment arbitration procedures should be prohibited considering that the lack of transparency in investment arbitration procedures would make new transparency, governance, capital adequacy or other obligations for funders impossible to enforce. Underlines that third party litigation funding of investment arbitration multiplies the regulatory chilling effect and financial burdens for States of such proceedings and that its prohibition would protect the ability of States to legislate in the general interest.
Amendment 6 #
Motion for a resolution Recital A A. whereas third party litigation funding (TPLF) is a growing practice whereby commercial investors (‘litigation funders’) who are not a party to a dispute invest in legal proceedings and pay legal and other expenses, in exchange for a share of any eventual award; whereas
Amendment 60 #
Motion for a resolution Paragraph 3 a (new) 3 a. Considers that commercial TPLF shows similarities to financial services, in particular investment funds and hedge funds. Therefore, TPLF rules should be applied without prejudice to existing relevant national, Union and international provisions regarding financial services.
Amendment 61 #
Motion for a resolution Paragraph 3 b (new) 3 b. Points out that Directive2020/1828 sets out rules to ensure that a representative action mechanism for the protection of the collective interests of consumers is available in all Member States, while providing appropriate safeguards to avoid abusive litigation;
Amendment 62 #
Motion for a resolution Paragraph 4 4. Recommends the establishment of a system of authorisation for litigation funders, permitting the introduction of corporate governance and confidentiality requirements and supervisory powers to protect claimants, and to ensure that funding is only provided by entities that are committed to complying with minimum standards in terms of transparency, governance and capital adequacy, and observing a fiduciary relationship vis-à-vis claimants and intended beneficiaries; stresses the need to ensure that this system does not create excessive administrative burdens for Member States;
Amendment 63 #
Motion for a resolution Paragraph 4 4. Recommends the establishment of a system of authorisation for litigation funders,
Amendment 64 #
Motion for a resolution Paragraph 4 4. Recommends the establishment of a system of authorisation for litigation funders, permitting the introduction of corporate governance requirements and supervisory powers to protect claimants, and to ensure that funding is only provided by entities that are committed to complying with minimum standards in terms of transparency, governance and capital adequacy, and observing a fiduciary
Amendment 65 #
Motion for a resolution Paragraph 4 4. Recommends the establishment of a system of authorisation for litigation funders, permitting the introduction of corporate governance requirements and supervisory powers to protect claimants, and to ensure that funding is only provided by entities that are committed to complying with minimum standards in terms of transparency, independence, governance and capital adequacy, and observing a fiduciary relationship vis-à-vis claimants and intended beneficiaries;
Amendment 66 #
Motion for a resolution Paragraph 4 a (new) 4 a. Recommends that any regulation of TPLF preserves the possibility for civil society organisations to access funding to litigate for the protection of human rights, workers’ rights, consumer rights and the environment, including by creating exceptions to general rules on TPLF;
Amendment 67 #
Motion for a resolution Paragraph 5 5. Recommends that litigation funders be obliged to respect a fiduciary duty of care requiring them to act in the best interests of a claimant.
Amendment 68 #
Motion for a resolution Paragraph 5 5. Recommends that litigation funders be obliged to respect a fiduciary duty of care requiring them to act in the best interests of a claimant. Believes that litigation funders should be prevented from exercising control over the legal proceedings they fund, which should be the sole responsibility of the claimant and their legal representatives
Amendment 69 #
Motion for a resolution Paragraph 6 6.
Amendment 7 #
Motion for a resolution Recital A A. whereas third party litigation funding (TPLF) is a growing practice whereby
Amendment 70 #
Motion for a resolution Paragraph 6 6. Underlines that conflicts of interest may arise where there are undue relationships between litigation funders, qualified entities, law firms, aggregators, including claims-collection and award
Amendment 71 #
Motion for a resolution Paragraph 6 6. Underlines that conflicts of interest may arise where
Amendment 72 #
Motion for a resolution Paragraph 6 6. Underlines that conflicts of interest may arise where there are pre-existing contractual relationships between litigation funders,
Amendment 73 #
Motion for a resolution Paragraph 7 7. Believes that litigation funders should not be permitted to abandon funded parties in litigation, except in restricted and well-defined circumstances, leaving claimants solely responsible for all costs of the litigation, which may have only been pursued due to the involvement of the funder; stresses therefore that contractual arrangements on the basis of conditional funding should be considered as void;
Amendment 74 #
Motion for a resolution Paragraph 7 7. Believes that litigation funders should not be permitted to abandon funded parties in litigation, except in
Amendment 75 #
Motion for a resolution Paragraph 7 7. Believes that litigation funders should not be permitted to abandon funded parties in litigation throughout the whole litigation process, except in restricted and well-defined circumstances, leaving claimants solely responsible for all costs of the litigation, which may have only been pursued
Amendment 76 #
Motion for a resolution Paragraph 8 8. Believes that, just like claimants, litigation funders should be responsible for the defendants’ costs arising from unsuccessful litigation (such as an adverse cost award).
Amendment 77 #
Motion for a resolution Paragraph 9 9. Considers that legislation should impose limits to
Amendment 78 #
Motion for a resolution Paragraph 9 9. Considers that legislation should impose limits on the proportion of the award that litigation funders are entitled to by virtue of a funding agreement. Believes that only under exceptional circumstances arrangements between litigation funders and claimants should vary from the rule that a minimum of
Amendment 79 #
Motion for a resolution Paragraph 10 10. Considers that there should be transparency regarding the involvement of litigation funding in legal proceedings,
Amendment 8 #
Motion for a resolution Recital A a (new) A a. whereas in some countries legal costs can be very high and prohibitive and TPLF can sometimes constitute the only chance for claimants to access justice in the first place;
Amendment 80 #
Motion for a resolution Paragraph 10 10. Considers that there should be transparency regarding the involvement of litigation funding in legal proceedings, including obligations for claimants and their lawyers to disclose funding agreements to courts and defendants. Notes that, currently, courts or administrative authorities and defendants are often not aware that a claim is funded by a
Amendment 81 #
Motion for a resolution Paragraph 10 10. Considers that there should be
Amendment 82 #
Motion for a resolution Paragraph 10 10. Considers that there should be transparency regarding the involvement of litigation funding in legal proceedings, including obligations for claimants and their lawyers to disclose funding
Amendment 83 #
Motion for a resolution Paragraph 11 11. Is of the opinion that supervisory authorities, and courts and administrative authorities were appropriate in accordance with national procedural law, should have the powers to facilitate the enforcement of legislation adopted to achieve the goals set out above; recommends the establishment of a complaints system that does not give rise to significant costs and administrative burdens for Member States. Considers that supervisory authorities, and courts and administrative authorities where appropriate in accordance with national procedural law, should have the powers to address abusive practices by authorised litigation funders;
Amendment 84 #
Motion for a resolution Paragraph 11 11. Is of the opinion that supervisory authorities,
Amendment 85 #
Motion for a resolution Paragraph 11 11. Is of the opinion that supervisory authorities, and courts and administrative authorities were appropriate in accordance with national procedural law, should have the powers to facilitate the enforcement of legislation adopted to achieve the goals set out above
Amendment 86 #
Motion for a resolution Paragraph 11 11. Is of the opinion that supervisory authorities,
Amendment 87 #
Motion for a resolution Paragraph 12 12. Requests the Commission to submit a proposal for a
Amendment 88 #
Motion for a resolution Paragraph 12 12. Requests the Commission to submit a proposal for a
Amendment 89 #
Motion for a resolution Paragraph 12 12. Requests the Commission to submit a proposal for a directive to regulate commercial third party litigation funding, following the recommendations set out in the Annex hereto;
Amendment 9 #
Motion for a resolution Recital A a (new) A a. whereas currently only very few cases of TPLF have been reported in Member States;
Amendment 90 #
Motion for a resolution Annex I – paragraph 10 – point 1 (1) Third-party litigation funding is a commercial practice which is quickly developing into a litigation services market
Amendment 91 #
Motion for a resolution Annex I – paragraph 10 – point 1 (1)
Amendment 92 #
Motion for a resolution Annex I – paragraph 10 – point 1 Amendment 93 #
Motion for a resolution Annex I – paragraph 10 – point 1 (1) Third-party litigation funding is a commercial practice which is quickly developing into a litigation services market without any proper legislative framework being in place at Union level. Despite the fact that litigation funders are regularly established and operating in various Member States, domestically or across borders, they have so far been subject to different national rules and practices. Diverging rules and practices in Member States are likely to constitute an obstacle to the functioning of the internal market. A lack of clarity on the terms on which commercial third party litigation funders (‘litigation funders’) may operate, in particular taking into account that
Amendment 94 #
Motion for a resolution Annex I – paragraph 10 – point 1 a (new) (1 a) Commercial third-party litigation funding shows similarities with financial services. Therefore third-party litigation funding rules should be applied without prejudice to existing national, Union and international provisions regarding financial services in view of ensuring full protection of service users.
Amendment 95 #
Motion for a resolution Annex I – paragraph 10 – point 2 (2) Union law s
Amendment 96 #
Motion for a resolution Annex I – paragraph 10 – point 2 (2) Union law seeks to ensure a balance between access to justice and providing appropriate safeguards to those engaged in proceedings
Amendment 97 #
Motion for a resolution Annex I – paragraph 10 – point 2 (2) Union law seeks to ensure a balance between access to justice and providing appropriate safeguards to those engaged in proceedings, to prevent their wish to access justice from being unjustly exploited. When litigation funders provide financing for legal proceedings in exchange for a share of any compensation awarded, a
Amendment 98 #
Motion for a resolution Annex I – paragraph 10 – point 2 a (new) (2 a) Third-party litigation funding could increase access to justice if the associated risks are mitigated; therefore, it is crucial to ensure a necessary balance between improving the claimants’ access to justice and appropriate safeguards to avoid abusive litigation;
Amendment 99 #
Motion for a resolution Annex I – paragraph 10 – point 2 b (new) (2 b) Responsible third-party litigation funding can lower costs, make those more predictable, simplify unnecessary procedures and deliver efficient services at costs that are proportionate to the amounts in dispute;
source: 695.342
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History
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