Originally from Handbook on Third-Party Funding in International Arbitration

1.1.   TPF Regime in Spain

1.1.1. Is TPF commonly used in your Jurisdiction? If yes, since when (is it a new trend or a well-established practice)? 

TPF is not commonly used in Spain, but anecdotal evidence suggests that it is becoming increasingly known and increasingly used.

1.1.2. Please shortly describe the TPF market in your Jurisdiction. Is it dominated by local or international Funders, which type of Funders are active, which cases get typically funded? Is there any source on Funders (like the overview published by the German Bar)?

Given the incipient state of the Spanish TPF market, the principal players are the leading international funders. There are reports of Spanish funders being created, but this process is still in its early stages. Public reports have revealed that TPF has been provided to Spanish entities involved in insolvency proceedings in order to fund investment arbitrations. The large number of investment arbitrations filed in recent years by international investors in renewable energy against Spain quite likely includes a number of funded claims. As these cases proceed, the existence of funding arrangements will likely be disclosed. Press reports have disclosed the funding of Spanish court cases involving consumer and similar claims.

It is suspected that international arbitrations are more attractive to funders than Spanish litigation, due to the unpredictability and length of Spanish litigation.

1.1.3. Are there any statutes or case law dealing with TPF or regulating Funders? If yes, please address these. 

To our knowledge, there is to date no statutory regulation or jurisprudential guidance in this area.

1.1.4. Are there any legal restrictions? To what extent do common law concepts like champerty, maintenance, barratry, or comparable civil law concepts as usury or prohibition of pactum de quota litis affect TPF? Can a law firm act as a Funder?

The noted common law concepts do not have relevant parallels in Spanish law. As for contingency fees, these were expressly approved by the Spanish Supreme Court in 2008.