Deminor Wiki - European Litigation Funders Association (ELFA)

Read below for a definition of the term: "ELFA".

What is the "European Litigation Funders Association"?

The European Litigation Funders Association (ELFA) is a Brussels-based organisation that represents the interests of commercial litigation funders operating within the European Union.

Established in June 2022, ELFA serves as a collective voice for the litigation funding industry, aiming to promote best practices, transparency, and ethical standards across the sector. 

Litigation Funding in Europe

Litigation funding, also known as third-party funding, involves a financial entity providing capital to cover legal costs in exchange for a portion of the financial recovery in the event of a successful lawsuit. The European Litigation Funders Association (ELFA) is a professional organization established to represent the interests of litigation funders across Europe. ELFA was founded by three leading litigation funders with a European footprint who chair its board Deminor (Charles Demoulin, Chief Investment Officer) Nivalion AG (Thomas Kohlmeier), and Omni Bridgeway (Wieger Wielinga). ELFA was established to serve as the European voice of the commercial litigation funding industry.

With the objective of representing the industry’s interests before governmental bodies, international organisations and professional associations, ELFA also aims to act as a clearinghouse and reference for relevant information, research and data regarding the uses and applications of commercial legal finance within the European continent.

Mission and Objectives

The mission of ELFA is to promote a robust and fair litigation funding market by setting high standards of transparency, ethics, and professionalism. The association works to ensure that its members operate with integrity, fostering confidence in litigation funding as a legitimate financial service within the legal industry.

ELFA’s key objectives include:

  1. Promoting best practices: ELFA develops and implements a code of conduct that governs the practices of its members, ensuring that they adhere to principles of fairness, accountability, and transparency.
  2. Advocating for regulation: The association actively engages with European regulatory bodies and policymakers to create a balanced framework that protects both the interests of litigants and funders.
  3. Supporting market development: ELFA seeks to create a conducive environment for the growth of litigation funding across various jurisdictions in Europe, ensuring that claimants have access to justice through financial support.
  4. Providing education and awareness: ELFA works to raise awareness of litigation funding, educating legal professionals, policymakers, and the general public on its role and benefits within the justice system.

Code of Conduct

A cornerstone of ELFA’s work is its Code of Conduct, which outlines the ethical and operational standards to which all member organizations must adhere. This code ensures:

  • Transparency in the funding agreements between funders and litigants.
  • Clear communication of the financial terms, including any potential risks or conflicts of interest.
  • Accountability in the management of legal costs and the distribution of financial recoveries.
  • Commitment to not interfering with the independence of the legal process, preserving the professional integrity of legal practitioners.

Membership

ELFA membership is open to litigation funders who meet strict financial, operational, and ethical standards. Prospective members are required to demonstrate a commitment to ELFA’s principles and must maintain financial resources sufficient to fund the legal cases they engage with. The association regularly monitors its members to ensure compliance with the code of conduct and maintain trust in the industry.

Influence and Advocacy

ELFA actively works with European regulatory bodies and international organizations to influence the legal and regulatory framework governing litigation funding. As the industry continues to grow, ELFA’s role in shaping policy has been crucial in ensuring that regulations support both the expansion of litigation funding and the protection of parties involved. The association emphasizes the importance of striking a balance between regulation and innovation, ensuring that litigation funding remains accessible while maintaining high ethical standards.