Investors Take Note – Third‑party Litigation Funding In Poland

Third-party litigation funding (TPLF) is a financial arrangement under which an external investor provides capital to cover the costs of legal proceedings in return for a share of the proceeds if the case succeeds.

Current status of litigation funding 

The UK and the Netherlands are the most mature TPLF markets, where funding is widely used in commercial litigation, arbitration, competition damages, insolvency, and large-scale group actions. Australia and Canada also have a long-standing acceptance of TPLF, particularly in class actions and insolvency. In contrast, TPLF in the United States is a more recent development on a broad scale, but it is growing rapidly, especially in complex civil litigation and international arbitration.

Within the European Union, there is no single EU-wide TPLF regime, but the practice is spreading across member states, particularly in connection with collective actions and cross-border disputes.

Poland – one to watch

TPLF is a relatively new concept in Poland. While Polish law does not provide a specific statutory regime for third-party litigation funding, it is generally permissible under existing private-law principles, as there are no express prohibitions.

Funding arrangements are based on freedom of contract, allowing parties to agree that a funder will cover litigation costs in exchange for a share of the recovery, typically structured as a success fee. Polish law also permits the assignment of claims, enabling structures in which a funder acquires a litigious claim and finances its enforcement.

Although still an emerging market, TPLF in Poland is attracting growing interest from international funds and specialist local advisers. In practice, it is used mainly in high-value commercial disputes and international arbitration, mass consumer claims (such as CHF mortgage and bank-related cases), and insolvency or asset-recovery scenarios.

Investors take note

Two key features of the Polish market are its flexibility and the funder remuneration model. Polish law does not restrict the type or size of claims that may be funded, nor does it impose a cap on the funder's share of recovery. While Polish lawyers are subject to ethical limits on classic contingency fees (quota litis), these restrictions do not apply to external funders. The development of TPLF is slowed down in Poland because parties winning a given litigation may claim only a portion of fees incurred which is set in an ordinance by the Minister of Justice. Limitations of the winning party to claim a return of costs incurred do not, however, apply to arbitration which is a dispute resolution mechanism particularly interesting to TPLF. 

At the same time, the absence of a dedicated TPLF framework creates regulatory uncertainty and increases the risk of potential abuse, particularly in mass claims. In response, Polish advisers typically structure TPLF arrangements carefully, relying on claim assignments, clear contractual terms, and tax-efficient vehicles, while emphasising transparency and ethical conduct to mitigate regulatory and reputational risks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.