PORTUGAL Law and Practice Contributed by: Rita Samoreno Gomes and Petra Carreira, PLMJ
of the claimant’s lack of standing will not affect the rights of the holders of the interests covered by the collective action in question. Third-party funding is currently a hot topic for discussion among legal practitioners in Portugal. 2.2 Third-Party Funding: Lawsuits There is no specific restriction on the types of lawsuits available for third-party funding. In any event, third-party funding continues to be sub- ject to the general mandatory rules and princi- ples of Portuguese law (public policy, good faith, abuse of rights, conflicts of interest and public morality). 2.3 Third-Party Funding for Plaintiff and Defendant There is no specific restriction on who may receive third-party litigation funding. If it com- plies with the mandatory rules and principles of Portuguese law, third-party funding is available for both plaintiffs and defendants in Portugal. 2.4 Minimum and Maximum Amounts of Third-Party Funding There is no express provision on the minimum or maximum amounts a third-party funder will fund. 2.5 Types of Costs Considered Under Third-Party Funding To date, there is little indication of what costs a third-party funder will consider funding. Funders are nevertheless 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 regulated. 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 right of the third-party funder to recover those costs will
be governed by the financing agreement (sub- ject to any applicable mandatory rules). 2.6 Contingency Fees Portuguese law expressly forbids arrangements whereby counsel’s fees are exclusively depend- ent on the outcome of the case. This prohibi- tion is expressly stated in the Rules of the Por- tuguese Bar Association, which also prohibit lawyers from sharing fees, except with lawyers, trainee lawyers and paralegals with whom they work. However, counsel’s fees may be composed of a fixed part regardless of the outcome of the case (eg, according to the time spent or the urgency or complexity of the matter) and a success fee depending on the results obtained. 2.7 Time Limit for Obtaining Third-Party Funding There is no express provision on when a party to the litigation should obtain third-party funding. Therefore, in light of the principle of freedom of contract, there are no time limits on when a party should obtain third-party funding. Portuguese courts do not impose any rules on the parties in relation to pre-action conduct. There are also no requirements for potential defendants to respond to pre-action letters. In the context of class actions, the Consumer Protection Class Actions Act (Decree-Law No 114-A/2023, dated 5 December) provides for a prior consultation procedure by the holders of the right to collective action. Before any applica- tion for a definitive prohibitory measure is made, 3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct
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