The European Commission (the “Commission”) has announced that it is not proceeding with plans to regulate third-party litigation funding (“TPLF”) at this time following feedback from participants at the recent High-Level Forum on Justice for Growth (the “Forum”) that there is currently no need to further regulate TPLF at an EU level. European Commissioner for Democracy, Justice, the Rule of Law and Consumer Protection, Mr Michael McGrath, has stated that the Commission will instead prioritise monitoring the application of the Representative Actions Directive (“RAD”) in the field of consumer collective redress.
Background
On 13 September 2022, the European Parliament adopted a resolution on responsible private funding of litigation, urging the Commission to propose legislation regulating TPLF in the EU.
The Commission progressed this mandate, publishing a study on Mapping Third Party Litigation Funding in the European Union (PDF, 6.3MB) in March 2025, discussed in our briefing entitled Third-Party Litigation Funding developments at the European Commission.
High-Level Forum on Justice for Growth
In February 2025, the Commission and the Council Presidency launched the Forum, to facilitate strategic informal discussions on how EU civil and company law as well as digitalisation of justice could be used to promote European competitiveness and growth. The Forum also represented an opportunity to discuss potential new non-legislative and legislative initiatives in those areas and provide input on proposals already planned. The Forum brought together Member States, European Parliament and key EU level stakeholder organisations.
In his closing remarks at the conclusion of the Forum meeting on 18 November 2025 Commissioner McGrath noted that the Forum participants had indicated that there is currently no need to regulate TPLF at EU level. The Commission will instead focus on monitoring the application of the RAD. The RAD was transposed into Irish law through the Representative Actions for the Protection of the Collective Interests of Consumers Act 2023 (the “Act”). Whilst the Act was commenced on 20 April 2024, the current prohibition on TPLF in Ireland impacts the effectiveness of the Act given the costs associated with representative actions.
Comment
While the regulation of TPLF at an EU level is paused, TPLF and its regulation, is a matter for individual Member States. In this regard, the Irish Law Reform Commission’s (“LRC”) forthcoming report on TPLF is highly anticipated as this report is expected to inform whether there will be any amendment to the existing prohibition against TPLF in Ireland. As discussed in our briefing entitled LRC recommendations on Third-Party Litigation Funding expected in Spring 2026, the LRC has indicated that its report on TPLF is at an advanced stage and expected to be published in late Spring 2026.
Overall, this is an interesting development perhaps signalling that the Commission is interested to monitor how the RAD is evolving in Member States as well as providing time to consider the output of the LRC’s report. We will continue to monitor developments and keep you up to date. In the meantime, if you would like to discuss any of the matters covered in this update in more detail, please get in touch with any member of our Litigation, Dispute Resolution and Investigations Group.