PORTUGAL Law and Practice Contributed by: Rita Samoreno Gomes, Petra Carreira and Maria Berta Jerónimo, PLMJ
Parties that join the proceedings as claimants or defendants will be liable for costs in the same way as the original parties. Parties that join the proceedings because they have an indirect interest in the case may also be liable for costs. Where the settlement is made between a party exempted from payment of costs and another party which is not exempted, the court, after hearing the public prosecutor, will set the proportion in which costs are to be paid. Under the specific class action rules, if the court rules even just partially in favour of the claimant, the claimant will be exempt from court costs. If the claim is universally unsuccessful, the court will order the claimants to pay an amount to be fixed by the court as costs. This amount will range from 10% to 50% of the amounts due in ordinary civil claims. In determin- ing the specific amount to be paid by an unsuccessful claimant, the court will consider the economic situa- tion of the claimant and the reasons why the claim did not succeed. Conversely, defendants in class actions must pay court costs, as is the case in any other civil proceedings. Under the Consumer Protection Class Actions Act, individual consumers covered by a class action for redress measures are not required to pay any court costs, as they are not considered parties to the action. Funding Third-party funding is not yet specifically regulated in Portugal. There is also no specific restriction on the types of lawsuits available for third-party funding. Given the current lack of regulation and in light of the principle of contractual freedom, it is understood that parties can resort to third-party funding and will, in principle, have full discretion over how to govern their relationship with third-party funders. However, third- party funding will always be subject to the general mandatory rules and principles of public policy, good faith, abuse of rights, conflicts of interest and public morality. There is no express provision on minimum or maxi- mum amounts a third-party funder will fund. To date,
there is also little indication of which costs a third- party funder will consider funding. Funders are nev- ertheless expected to rely on standard contracts used in other countries where third-party funding has been permitted and used for a long time or specifically reg- ulated. Under Portuguese law, the principle and limits of freedom of contract, in principle, allow any legal costs to be financed by a third party. The third-party funder’s right to recover those costs will be governed by the financing agreement (subject to any applicable mandatory rules). It should be noted, however, that recourse to these financing schemes may raise further and specific issues within some settings, most notably when the litigation concerned is not a dispute strictly between private parties (eg, litigation funding arrangements within opt-out-based class actions whereby the ser- vicing of the debt is to be made via any unclaimed compensation amounts). There is no specific rule requiring parties to disclose whether a third party is funding them. There is cur- rently an exception to this when it comes to class actions for consumer protection – under the Consum- er Protection Class Actions Act, the claimant must provide the court with a notarised copy of the funding agreement entered into with the third party, written in a clear, easily understandable manner and in Portu- guese, and it must include: • a financial summary listing the sources of funding used to support the class action; and • the various costs and expenses that will be borne by the funded party. Understanding third-party litigation funding and the terms of funding agreements may still be a relevant factor, or even a requirement, in certain cases (eg, in the cases referred to above). To date, there is no established case law in Portugal on whether and to what extent third-party funding arrangements are lawful. Until very recently, third- party funding was very rare. However, since Decem- ber 2020, several class actions backed by litigation funding arrangements have been brought before the Portuguese courts. The extent to which litigation fund-
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