Third-party litigation funding in India will likely continue unregulated for the foreseeable future as the Central government revealed today that no regulatory framework is under consideration at present. .The Centre also stated that it is also not examining the potential of litigation funding to address high litigation costs and case pendency.This was revealed in response to parliamentary question posed by Rajya Sabha member representing the Trinamool Congress, Mohammed Nadimul Haque. The response by Minister of State (Independent Charge) of the Ministry of Law & Justice Arjun Ram Meghwal stated,"At present, there is no proposal under consideration of the Government for establishment of a legal and regulatory framework to facilitate Third Party Funding of litigation in the country and further, no examination of the potential of Third Party Litigation Funding as a means to address high litigation costs and pendency of cases has been carried out by the Government.".Third-party litigation funding involves financing the legal costs of a party to a case by entities who are not parties to the dispute, in return for a share of the damages awarded or the settlement.While it is a relatively new field in India, its origins go back a few decades in other parts of the world, especially in the United Kingdom and Australia.In 2018, in Bar Council of India v. AK Balaji, the Supreme Court of India implicitly recognised the practice. However, there is still no legislation explicitly regulating third-party litigation funding and with the government's answer in Parliament, it is clear that it will continue to function in murky waters.Despite this, litigation financing is evolving at a considerable pace as LegalPay founder Kundan Shahi explained in this interview with Bar and Bench..Litigation Financing Deep-dive: In conversation with LegalPay founder Kundan Shahi.[Read Question and Answer]
