EGYPT Law and Practice Contributed by: Mohamed Osama, Hana Elbarbary and Hamza Shehata, Shehata & Partners
2. Litigation Funding 2.1 Third-Party Litigation Funding The Procedural Code is silent on the issue of third-party litigation funding. In this regard, the authors are of the view that the phenomenon of third-party funding is perfectly legal from a Sha- ria perspective. As a matter of fact, third-party funding agreements could be easily anchored in several nominate agreements under Islamic Sharia. Furthermore, Egyptian law permits con- tingency fees and alternative fee arrangements between lawyers and their clients. Accordingly, it would be very hard to argue that typical third- party funding arraignments could fall foul of Egyptian public policy. 2.2 Third-Party Funding: Lawsuits There are no specific rules on this issue under the Procedural Code. Therefore, it is permissible generally to have third-party funding for most types of cases. 2.3 Third-Party Funding for Plaintiff and Defendant Third-party funding is generally available for both the plaintiff and the defendant 2.4 Minimum and Maximum Amounts of Third-Party Funding There is not enough data in Egypt to be able to determine a minimum and a maximum threshold for third-party litigation funding in the country. 2.5 Types of Costs Considered Under Third-Party Funding There is not enough data in Egypt to be able to discern the type of costs that will be considered for funding by third-party funders.
2.6 Contingency Fees The EBL allows lawyers to receive contingency fees and therefore allows them to enter into alternative fee arrangements with their clients. At the time of enacting the EBL, the margin that could be agreed upon between the lawyer and their client was between 5% and 20% of the outcome of the case. However, the 5% minimum was declared uncon- stitutional by the Supreme Constitutional Court later on. Accordingly, there is not currently a minimum threshold as a matter of Egyptian law. Furthermore, the Supreme Constitutional Court ruled that alternative fee arrangements between client and counsel cannot be based on the cli- ent’s solvency. In practice, it must be noted that contingency fees and alternative fee arrange- ments are quite popular and are frequently used by several top-tier law firms in Egypt. 2.7 Time Limit for Obtaining Third-Party Funding Generally, there are no specific deadlines or time limits for a party to the litigation to obtain third- party funding. In some cases, the legislature obliges the plain- tiff to notify the defendant before filing a lawsuit, as in the following examples. • In cases of performance or termination of the contract (Articles 157 and 158, 203 of the Civil Code). The penalty for not notify- ing the defendant is the inadmissibility of the claim, unless the parties agree to exempt one another from the obligation to notify. 3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct
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