PERU Law and Practice Contributed by: Renzo Salvatore Monroy Pino, Roberto Shimabukuro Miyasato, Anibal Jong Urtecho Gómez and Alexander Montenegro, Monroy & Shima Abogados
2. Litigation Funding 2.1 Third-Party Litigation Funding
rather than contingency arrangements. As Peru’s funding market develops, more diverse models may emerge addressing specific needs of both parties in various litigation types. 2.4 Minimum and Maximum Amounts of Third-Party Funding In Peru, no legally established funding limits exist for third-party litigation financing. Thresholds are set by individual funding companies based on commercial viability, focusing on cases with sufficient potential recoveries to justify investment costs. Funders like Loopa Finance typically prefer cases with anticipated damages in hundreds of thousands or millions of dollars. Funding amounts are negoti- ated based on legal costs, complexity and recovery potential. The largely unregulated environment allows funders to establish their own criteria based on their risk assessment and business models. 2.5 Types of Costs Considered Under Third- Party Funding In Peru, third-party funders typically finance neces- sary litigation expenses including attorneys’ fees, court costs, expert witness fees, evidence gather- ing and document production expenses. Some also cover specialised services such as forensic account- ing, technical analysis or translations for international disputes. Arrangements are customised to each case and may include appeal processes. However, funders generally do not cover costs unrelated to direct claim prosecu- tion or adverse costs if the funded party loses, unless specifically negotiated. All covered costs are detailed in the funding agreement negotiated between parties based on specific case requirements. 2.6 Contingency Fees In Peru, contingency fees are permitted as no legisla- tion prohibits them, following the principle that what is not expressly forbidden is allowed. Attorneys and clients can negotiate fee structures where payment depends wholly or partially on case outcomes. These arrangements remain subject to contractual principles and bar association ethical requirements.
Third-party litigation funding is permitted in Peru as there are no specific laws prohibiting this practice. This permission stems from Article 2, Section 24, Par- agraph A of the Peruvian Constitution, which estab- lishes that no one is obligated to do what the law does not mandate, nor prevented from doing what it does not prohibit. This constitutional principle allows the practice to exist in the absence of specific regulations. While third-party funding has been more commonly observed in arbitration proceedings, it is expanding into traditional litigation as well. Companies like Loopa Finance already operate in Peru, offering litigation financing services to parties seeking financial sup- port for their legal proceedings. Currently, there are no specific restrictions governing third-party funding in Peru, allowing this practice to develop according to market needs and general legal principles. 2.2 Third-Party Funding: Lawsuits In Peru, third-party funding is available for any lawsuit type due to the absence of specific limiting regula- tions, following the principle that what is not prohibit- ed is permitted. Funders typically focus on high-value commercial disputes with significant return potential. Preferred cases include complex commercial litiga- tion, class actions, intellectual property disputes and high-value arbitrations with substantial damages claims that make funding financially viable. While still developing in Peru’s legal market, companies like Loopa Finance operate primarily with cases showing strong legal merits and significant potential recovery. 2.3 Third-Party Funding for Plaintiff and Defendant In Peru, third-party funding is available to both plain- tiffs and defendants without legal restrictions, though plaintiffs seeking monetary claims receive fund- ing more frequently due to straightforward recovery potential. Defendants can access funding particularly for coun- terclaims or to prevent significant financial loss, typi- cally structured as loans or insurance-like products
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