Originally from Handbook on Third-Party Funding in International Arbitration, Second Edition

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PART I.  THE THIRD-PARTY FUNDING LANDSCAPE

1.  The TPF market in Spain

1.1.  Please shortly describe the TPF market in your Jurisdiction.

TPF is a developing market that has become increasingly attractive to foreign investors in Spain in recent years, especially for antitrust claims, international arbitration claims and other large-scale class actions.

There is no specific Spanish law governing TPF. Since it is not expressly forbidden, TPF is allowed in Spain under general civil laws. A wide range of structures can be implemented for these purposes, including the purchase of gross proceeds, assignment of claims, or direct financing to the claimant(s) or law firm,  provided that the funding agreements do not contravene any legal or public policy rules (e.g., usury) and comply with the ethical standards for lawyers (e.g., independence in legal advice, conflict of interest, etc.).

In contrast to Spain, the EU has developed a regulatory framework for TPF. Some directives have already explicitly introduced rules for litigation funding. Spain is likely to be influenced by the EU’s evolution on TPF through regulations and directives in the future.

1.2.  Is it dominated by local or international Funders? Which Funders are active? Which cases typically get funded?

The practice has attracted the growing interest of major international funders, but there are also local players.

The typical funded cases are antitrust cases (follow-on claims) since they are based on a prior administrative decision adopted by the Spanish or European competition authority or a CJEU decision, which reduces part of the funding risk. Other cases that are also funded involve commercial litigation, infrastructure, construction and energy, international arbitration, intellectual property and patents.