Funding Collective Dispute Resolution through Litigation Investment

This dissertation is about funding collective dispute resolution through litigation investment. The research focuses on the legal and normative framework for this in the Netherlands and draws comparative insights from England & Wales and Australia. Litigation investors – commercial entities investing in legal proceedings in exchange for a share of the proceeds – have made collective actions more feasible but also raise concerns such as conflicts of interests. The central research question is to what extent and in what manner the legal framework for funding collective dispute resolution through litigation investment in the Netherlands requires further development, considering the normative and legal framework for this in England & Wales and Australia. The methodology combines legal-dogmatic analysis, comparative law, empirical and legal economic perspectives, and normative evaluation, ensuring a comprehensive and academically rigorous approach. This approach is both practically and scientifically relevant, as it addresses the challenges and uncertainties faced by practitioners, policymakers and scholars in navigating the evolving landscape of litigation investment. According to this dissertation, litigation investment is best understood through the lens of venture capital, with litigation investors acting as risk-bearing investors who negotiate both financial and governance rights. The current Dutch legal framework is complex, with an active role for the judiciary and a cautious legislature. Comparative analysis with England & Wales and Australia reveals alternative regulatory models and gives inspiration for clearer rules and oversight. The normative framework for litigation investment is rooted in access to justice, fairness, and the balancing of interests between claimants and defendants. Further development of the legal framework is necessary to provide legal certainty, prevent abuses, and maintain the benefits of collective redress. The dissertation thus contributes to both legal scholarship and practice by offering a comprehensive, comparative, and empirically informed analysis of litigation investment in collective dispute resolution, and by formulating concrete proposals for reform that are sensitive to the complexities and challenges of this rapidly evolving field.