Dmitry Uryakin has assessed for the Vot Tak TV the possibility of litigation lending in Russia

The Federation Council of Russia is studying a draft law which proposes to introduce litigation lending in the country. It is expected that banks or other investors would finance litigation and then, together with the plaintiff, receive a portion of the recovered sum from the losing party.

Dmitry Uryakin, an associate at Maxima Legal, told the international online project Vot Tak TV that similar mechanisms are already being used in practice.  “The essence of assignment agreements with condition of debt collection was that the court representative was assigned the right to collect the debt in court. If the collection process was successful, the litigation representative would return to the creditor the amount received less his commission,” the expert explained.

However, the introduction of litigation lending in Russia can be difficult due to the small percentage of actually executed judgments, which is often due to the lack of money of debtors. “In such situations, a financial company, having assessed the possible risks of non-execution of a court decision in advance, is likely to refuse to finance litigation,” stressed Dmitry.

Also, the established practice of courts to significantly reduce the amount of costs incurred for legal assistance may have a negative impact on the attractiveness of court financing. In fact, the problem with access to justice, which the legislator so desires to solve, can be solved more elegantly, summarized Dmitry Uryakin. In his opinion, it would be sufficient to permit the collection of “success fees” at the level of court practice, as well as to adjust “reasonable limits for the exacted legal costs,” equating them to the actual cost of legal services on the market.

You can read the material on the on the Vot Tak TV website >>>