Global and Indian companies Vouch for Organised Litigation Finance Practise in India

In the last decade, litigation finance has seen substantial growth globally. The Indian market is uniquely lucrative for funders because the torts of champerty and maintenance never had force in India. Consequently, global litigation funders are increasingly looking to fund Indian disputes and parties.

In recent years, the Indian market has been hit with a number of frauds and scams that have eroded the investments and deposits of thousands of people. Banking sector alone has witnessed multiple scams. The scams in Punjab and Maharashtra Co-operative Bank, as well as Laxmi Vilas Bank, are notable examples of scams of the same. In 2019-20 alone the total reported losses owing to bank fraud were at US$ 25 billion and this does not account for damages (including interest).

To ensure smooth growth in the Indian market and increase confidence among Indian consumers, funders have come together with institutions and legal service providers to form the ‘Indian Association for Litigation Finance’ (“IALF”) - a body that will self-regulate and promote knowledge about litigation finance in India. Funders such as Omni Bridgeway, Phoenix Advisers, Profile Investment and other service providers like Singularity Legal, Marsh, PSL Advocates and Solicitors, FTI Consulting and Grant Thornton are also involved.

Mr Prateek Bagaria, Founder, Singularity Legal LLP stated, “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 into 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.”

On the other hand, Tom Glasgow, CIO, Omni Bridgeway stated, “Indian parties are frequent users of offshore arbitration and litigation and there are many opportunities to help those parties de-risk, improve their prospects of success and generally leverage the value in their claims. Omni Bridgeway is a founding member of the International Legal Finance Association, a global, independent, non-profit trade association promoting the highest standards of operation and service for the international legal finance industry and dedicated to engaging and educating users and other interested stakeholders across the jurisdictions. As a member of the Working Group charged with building the framework for the Indian Association of Litigation Funders, I hope to bring the same international best practice and education to the Indian market.”

The Working Group will officially commence its work in a virtual signing and launch ceremony on 7 January 2021 at 1 - 3 PM IST. The ceremony will also be followed by a panel discussion on litigation finance in India between the members of the Working Group. The event is curated by Expert Talk and hosted by FTI Consulting. The foundation of the IALF has been spearheaded by Mr Prateek Bagaria (Founder, Singularity Legal LLP).