The New Year is going to mark a new reform in the India's legal industry with the launch of a dedicated self-regulatory body to fund the litigations in the country. The concept of litigation finance is not much known in India, however, to simplify its meaning, it refers "third party funding."
This concept allows a third party to provide a litigant, who otherwise lacks the necessary resources and funds needed to litigate or arbitrate a claim, or potentially to obtain funds to be repaid from any eventual recovery.
Notably, this concept is well-known globally. However, it is yet to catch pace in India. So, eyeing the "lucrative" Indian market, several international and national funders and legal firms have come together to set up the Indian Association for Litigation Finance’ (IALF) — a body that will self-regulate and promote knowledge about litigation finance in India.
The IALF would be launched on January 7 with several players such as Omni Bridgeway, Phoenix Advisers, Profile Investment and other legal service providers like Singularity Legal, Marsh, PSL Advocates and Solicitors, FTI Consulting and Grant Thornton, coming together to form the association.
One of the main objectives to launch such a body is "to ensure smooth growth in the Indian market and increase confidence among Indian consumers."
The members opine that the Indian market has been hit with a number of frauds and scams that have eroded the investments and deposits of thousands of people.
According to experts, this body will be helpful and bring in more reforms in the litigation industry.
Citing several bank scams that have taken place in the last two years, the organisers have pointed out that losses owing to bank fraud during the last two years were at $25 billion.
Commenting on the introduction of this new concept, Prateek Bagaria, founder of, Singularity Legal LLP said, “Indian law has been a frontrunner in accepting litigation finance since 1876. To add to this, international disputes have seen a huge growth in India today. Massive scams such as those in PMC and Laxmi Vilas Bank reflect the kind of large disputes that have brewed up in India."
"Therefore, the Indian market couldn't be more ready for the funders to tap in to this lucrative jurisdiction and to fund Indian disputes and parties. Through IALF, the funders, service providers, practitioners and arbitral institutions will set themselves up as progressive, knowledgeable and ethical service providers whom clients can readily engage," he added.