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As corporations expand their brand and provide services or products in the global marketplace, their exposure to liability for international claims significantly increase.  With cross-border disputes on the rise, multinational corporations and the jurisdictions in which they operate will likely see the emergence of a common framework for resolution of such disputes.  As a result, a uniform standard for conducting cross-border business will start to take shape; which may have the effect of deterring multinational companies from engaging in bad acts. 

One way for large corporations to be held accountable is via class action lawsuits.  In the United States and Canada, class actions are a common and accepted way to hold large corporations accountable for their wrongdoing.  While class action suits in the U.S. and Canada are a dime a dozen, such lawsuits have been infrequent in places such as Europe.  However, in 2013 the European Commission took steps toward allowing for more “class action type” lawsuits and recommended its constituents adopt methods for ‘collective redress’, which would allow several claimants to seek damages on a collective basis through one representative claimant.  The Commission’s objective was to create and improve access to justice for EU members to lodge collective claims for breaches in EU law.  Based on the famous and recent Facebook ‘class action’ brought in Europe where 60,000 people signed up - 25,000 of which have assigned their claims to join the class action, and 35,000 of which have registered to assign their claims when and if the suit widens to cover more users – it looks like the EU is embracing the concept of collective redress with open arms.

Interestingly, contrary to the US Chamber of Commerce’s assertion that class action type lawsuits on a global scale will only result in a “claims culture” (a term used to describe unscrupulous claimants), quite the opposite has occurred.  Class actions on an international level have been utilized mainly by corporations and investor claimants seeking redress for securities and anti-trust violations.  (See September 11, 2014 blog post titled “Snapshot of Success”, detailing positive results with the help of third party funding in the air-cargo class action suit as well as the S&P appeal.) 

With cross-border litigation on the rise due to brand expansion or events such as the global financial crisis, there is a high probability that third party litigation funding will rise along with it.  As international claimants seek to hold multinational corporations accountable for their bad acts, third party funding is an attractive tool for spreading the risk and costs of this type of high-stakes litigation.