Litigation financing

What is a litigation funder?

A litigation funder generally covers the costs of pursuing claims, either out of court or in court. This includes the client’s own legal fees, the opponent's costs, and court fees. The benefit is that affected parties bear no costs, even in the case of a loss. However, in the event of success, the litigation funder receives a success fee from the awarded compensation amount.

Why can’t a lawyer offer a success fee?

In Continental Europe, lawyers are legally prohibited from agreeing to success-based fees.

Lawyer’s Duty to Inform About Litigation Funding

According to the Swiss Federal Supreme Court’s decision of 22 January 2015 (2C_818/2014), fulfilling a lawyer's duty to inform clients, as required by professional and contractual obligations, includes not only providing information about the prospects of success, opportunities, and economic implications of a case or legal services but also informing clients about the option of litigation funding (SJZ 112 (2016) No. 2).

From the Federal Supreme Court’s reasoning, a general obligation to inform and advise can be inferred, requiring lawyers to inform clients about the option of litigation funding. Both professional regulations and the general rules of contract law require lawyers to provide comprehensive information to their clients. Therefore, lawyers in Liechtenstein are also obligated to inform their clients not only about legal aid but also about the possibilities of litigation funding.