PORTUGAL Trends and Developments Contributed by: Nuno Temudo Vieira, Alexandra Valpaços, Miguel Santos Almeida and João Saúde, Sérvulo & Associados
guese-speaking jurisdictions, and there are several partnerships between law firms in different Portu - guese-speaking countries. There has also been an increase in the number of appointments of Portuguese arbitrators in other jurisdictions. Moreover, for a long time now, it has been very common for Portuguese law firms to intervene in matters in other Portuguese- speaking countries, particularly in African countries such as Angola, Cape Verde, Mozambique and São Tomé e Príncipe. It is therefore likely that the growth of TPF in Portugal and the clear expansion it has also been experienc - ing in Brazil, together with the consistent building of a lusophone arbitration ecosystem, may have a spillover effect on other Portuguese-speaking countries, par - ticularly African countries where Portuguese is the official language. This growth is expected to be driven in particular by the activities of funders operating in more developed Portuguese-speaking markets, such as Portugal, and it is expected that Portuguese law firms – by virtue of their relationships with clients and law firms in those jurisdictions on the one hand, and with TPF providers on the other – will come to play a very significant role in this growth, providing advice to both the funders and the parties receiving finance. Conclusions • TPF involves the financing of the costs associated with resolving a dispute (lawyers’ and experts’ fees, court fees and arbitration costs, amongst others) by someone other than the party itself or its lawyers. • TPF improves access to justice by enabling com - panies that lack financial resources to pursue their claims in court or arbitration, and also serves as a
management tool, allowing companies to litigate or arbitrate without allocating their own resources and thereby avoiding liquidity constraints. • Funding is typically provided on a “no-win, no-fee” basis, transferring the risk of unsuccessful litigation to the funder, who receives a share of the proceeds if the case succeeds. • Portugal has no specific law regulating TPF; in the absence of any prohibition, funding arrangements are generally deemed legal and are governed by general contract rules. • The Portuguese market for TPF has grown sig - nificantly over the last decade, with at least ten funders now active and high-value disputes increasingly being funded. • Prior to deciding to fund a claim, funders carry out thorough due diligence, aimed at determining how strong the case is, how much money is at stake, whether the opposing side would be able to pay if the case is won, how realistic it is to actually col - lect, and how long it will take to collect. • Funding agreements typically address key practical issues such as confidentiality, the funder’s level of involvement, adverse costs allocation, and priority arrangements for distributing recovered amounts. • Alternatives (or complements) to TPF include ATE insurance and lawyers’ contingent fees, although the latter is partially restricted in Portugal by the prohibition on quota litis pact. • The growth of TPF in Portugal and Brazil, com - bined with the strengthening lusophone arbitration ecosystem, is expected to produce a spillover effect on other Portuguese-speaking jurisdictions (especially in Africa), with Portuguese law firms playing a significant role in this expansion.
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