Poland embraces the concept of litigation funding. In fact, the largest funder of litigation in Poland is the State Treasury.
Role of the Polish Government
This role arises from the power of the court to grant the claimant a full or partial exemption from the obligation to pay legal expenses (including court costs, lawyers, experts). An exemption will be granted if the claimant can demonstrate that they are unable to cover such expenses. In Poland, the courts adopt the ‘loser pays’ principle, but a claimant with an exemption will very rarely be encumbered with an adverse costs order. In addition, low-cost Before The Event (BTE) insurance policies are now widely available.
No specific regulations are applicable to third party litigation in Poland. Therefore, if third party litigation funding does not breach Polish rules in proceedings, the agreement can be described as an unnamed contractual relationship that is permissible in accordance with Article 353 of the Polish Civil Code.
The strong role of the Polish Government in funding cases, combined with the BTE insurance regime and the relatively affordable litigation costs of high-value claims, make the Polish market less obviously attractive for commercial funders of litigation.
Scope for growth
Nevertheless, there is scope for the funding market to grow. Opt-in class actions are permitted in a range of claims and claimants in group actions cannot secure a State exemption from the payment of legal expenses.
Also, in 2011 the Barristers’ Council and Concordia Insurance signed an agreement specifying conditions for their cooperation in popularising BTE insurance as a stand-alone policy covering litigation in various areas of law. The policies are to be cheap and available to all, but whether this new market takes off remains to be seen.