Third Party Litigation Funding enables financial assistance to the claimant, for the purposes of litigation, by a third party who is unassociated to the suit. Commercial Funding is the well-linked form of TPLF.

In the case of Commercial funding, the litigation funder look forward to a certain percentage of profit, upon the conclusion of the Litigation. There is no specific law governing TPLF in India. However, reading the judicial precedents along with certain legal provisions, it can be inferred and anticipated that the practice of TPLF is not prohibited under Indian law.

Third Party Litigation Funding is the financial support for Litigation, provided by a person or an entity that is not a party to the litigation and having no direct interest in the profits.

Claimants are the legacy of TPLF as they are actually receiving a monetary award in case of a successful outcome.In addition to Third Party funders, investment banks, hedge funds, insurance companies, and pension funds, and many more also invest in legal claims as an asset. It can be referred to as class too.

Third Party Litigation Fundings PF covers legal counsel’s fee court’s fees, tribunals fee, cost of expert witnesses, pre-deposits, adverse costs order, and other dispute related expenses as well. A survey found that litigants spend up to INR 30,000 crores on legal costs in lower courts alone. The survey of 2015 – 2016, basically inferred to this in India. Disputes which attract TPF generally include Commercial Contracts majorly and International Commercial Arbitration, Tortious claims like Medical Malpractice, Insolvency proceedings. Many perspectives are looked into before awarding TPLF. Such as the Party’s Perspective, Funder’s perspective, and the System’s perspective.

It generally allows access to Law and Justice and allows better enforcement rights. It basically enables the creation of a financial legal field between parties. It’s main benefit can be extracted when parties are in a relationship of trust and share a fiduciary relationship with each other.

Third Party Litigation Fundings landscape in India:-

It is not new to the Indian Legal Market. In 2015, the Supreme Court in Bar Council of India vs. A.K. Balaji, it was stated that the legal permissability of TPLF in litigation and observed that “ There appears to be no restriction on third parties ( Non – Lawyers) funding the litigation and getting repaid after the outcome of the litigation.

Legal Advice :

In India, there are no specific provisions that apply to lawyers in advising clients in relation to third-party litigation funding. But there are standards of professional conduct rules made by the Bar Council of India under section 49(1)(c) of the Advocates Act, 1961, an ethical and professional guide for all advocates in conducting matters related to law and said ethical rules of the legal profession apply, not only when an advocate appears before a court, but also to practices outside of the court.


The actual benefit of Third Party Litigation Fundings is achieved when the claimant is in a better position. Considering, TPLF is new in Indian Market, it is also necessary for policymakers to make sure that there is an Environment of trust and confidence is there for practice, for claimants and funders. This trust will help all the parties to gain the maximum advantage of TPLF.

Third Party Litigation Fundings in India

This article is written by Bhumika Saishri Panigrahi and edited by Rupreet Kaur Dhariwal.

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