Comparative Law Researches

Comparative Law Researches

Contract’ Validity of Third Party Litigation Funding in American Law; with a view on Iran Law

Document Type : Original Research

Author
Ali Tahmasebi
Asistant Professor of Private Law, Law Department, Faculty of Literature and Humanities, Razi University, Kermanshah, Iran
Abstract
Commercialization of justice and increasing in litigation costs (court costs, fees etc.) has challenged access to court for some individuals. In order to remove this problem and facilitate their access to court, various mechanisms such as contingency fees, legal expenses insurance and funding litigation costs by third parties have been devised. The latter institution is an aleatory contract that for first time established during 1990S in Australia and then was accepted in other countries. The contract is concluded between a funder and a plaintiff, by which the former pays plaintiff’s litigation costs in exchange for share of recovery. There are arguments for and against this contract. In US legal system, The critics consider the contract void due to being Qarar, ignoring the prohibition of maintenance and champerty rules, contrast with public order, increasing the cases, encouraging unmeritorious claims and reducing the settlement’s incentive. Conversely, it could be considered valid based on the society’s need and social and economic interests, facilitating individual’s access to court, preventing from private justice, increasing incentive to settle and preventing to file baseless suit.
Keywords
litigation costs
Maintenance and champerty
Funding contract
Aleatory contract
Access to courts

Subjects

1. بابایی ایرج، حقوق بیمه، سمت، چاپ دهم، تهران، 1396.
2. پیر هادی محمدرضا، عقد احتمالی با تأکید بر بیع احتمالی، تحقیقات حقوقی آزاد، 1389.
3. دیّانی عبدالرسول، اعتبار تعهد پرداخت حق‌الوکاله از محکوم‌به، مجله حقوقی دادگستری، 1397
4. شهیدی مهدی، تشکیل قراردادها و تعهدات، چاپ اول، نشر حقوقدان، تهران، 1377.
5. شمس عبدالله، آیین دادرسی مدنی: دوره پیشرفته، ج 1، چ 2، میزان، تهران، 1381.
6. قاری سیدفاطمی محمد، حقوق بشر در جهان معاصر، دفتر دوم، نشر دانش، چاپ سوم، تهران، 1393.
7. کاتوزیان ناصر، قواعد عمومی قراردادها، جلد 1، چ 3، شرکت سهامی انتشار، تهران، 1376.
8. کاتوزیان ناصر، مقدمه علم حقوق، چ 68، شرکت سهامی انتشار، تهران، 1387.
9. جعفری لنگرودی، محمد جعفر، لزوم و جواز در عقود و ایقاعات، تحولات حقوق خصوصی، چ چهارم، انتشارات دانشگاه تهران، 1381.
10. جعفری لنگرودی محمد جعفر، مبسوط در ترمینولوژی، ج 4، چ 4، گنج دانش، تهران، 1388
11. حبیبی درگاه بهنام، مفهوم اصل دسترسی به دادگستری، ویژگی و جلوه‌های آن، مجله مطالعات حقوقی، دوره 10، شماره 1، 1397.
12. صادقی مقدم محمد حسن و رضا شکوهی زاده، حقوق بیمه، جلد اول، انتشارات دانشگاه تهران، چاپ دوم، 1392.
13. محقق داماد مصطفی، قنواتی جلیل، وحدتی شبیری سید حسن، عبدی‌پور ابراهیم، حقوق قراردادها در فقه امامیه، سمت، تهران، 1379.
14. Alrashid Meriam N, Jane Wessel and John Laird, »Impact of Third Party Funding on Privilege in Litigation and International Arbitration«, Dispute Resolution International, Vol 6, No 2 October, 2012.
15. Bushnell Christy B. »Champerty Is Still No Excuse In Texas: Why Texas Courts (And The Legislature) Should Uphold Litigation Funding Agreements«, Houston Business And Tax Law Journal, 2007.
16. Chen, Wenjing, A Comparative Study of Funding Shareholder Litigation, Springer, 2017.
17. Hodges Christopher, Stefan Vogenauer and Magdalena Tulibacka, The Costs and Funding of Civil Litigation, Hart Publishing, 2010.
18. Jacob Joseph M., Civil Justice in The Age of Human Rights, Ashgate Publishing Limited, 2007.
19. Jackson Rupert, »Review of Civil Litigation Costs; Preliminary Report«, Vol 1, TSO (The Stationery Office) and available from: Online www.tsoshop.co.uk, 2009.
20. Kerley, J.D. Peggy, Joanne Banker Hames, J.D. Paul Sukys, Civil Litigation, 5th edition, Delmar Cengage Learning, 2008.
21. Lyon Jason, » Revolution In Progress: Third-Party Funding Of American Litigation, UCLA Law Review, 2010.
22. Mulheron Rachael, The Class Action in Common Law Legal System: A Comparative Perspective, First Edition, Oxford – Portland Oregaon, 2004.
23. Peysner John, »England and Wales«, in The Costs and Funding of Civil Litigation, Hart Publishing, 2010.
24. Rand Report, »Third Party Litigation Funding and Claim Transfer, Rand Corp«, http://www. rand.org/events/2009/06/02.html (last visited April. 04, 2019)
25. Reimann Mathias, Cost and Fee Allocation in Civil Procedure: A Comparative Study, Springer, 2012.
26. Sebok. Anthony, The Inauthentic Claim, Vanderbilt Law Review, Vol 64, Issue 1, 2011.
27. Steinitzt Maya, »Whose Claim Is This Anyway? Third-Party Litigation Funding« , Minnesota Law Review, vol 95, 2011.
28. Steinitzt Maya, »The Litigation Finance Contract«, Willaim & Mary Law Review, Vol 54, Issue 2, 2012.
29. Tobias Bradley C., »Officious Intermeddling or Protected First Amendment Activity? The Constitutionality of Prohibitory Champerty Law After Citizens United«, William & Mary Bill Of Rights Journal, Vol 22, Issue 4, 2014.
30. Uzelac, Alan, Goals of Civil Justice and Civil Procedure in Contemporary Judicial Systems, 1 edition, Springer, 2010.