Edited by: Eleonora Ebau, PhD Student, Department of Law, UniTo.
In March 2020, in the United Kingdom, several organizations specialized in legal advice and other funders created the Community Justice Fund, a fund aimed at supporting communities that had suffered severe economic and social repercussions due to the Covid-19 pandemic.[1] Specifically, they raised funds to be disbursed to non-profit associations dealing with social issues such as: immigration and asylum, community care, debt, disability, discrimination, education, employment, housing rights, mental health, public and administrative law, and social benefits.[2] Among the various funders who took part in the initiative, the name of Therium Access, the non-profit division of the funder Therium, stands out. While the latter carries out the economic activity of litigation funding in civil and commercial matters, the mission of Therium Access is to fund – on a non-profit basis – those who would otherwise be unable to pursue a lawsuit, thus promoting and facilitating access to justice.[3] In light of the cross-Channel experience, the question arose as to whether Lexcapital S.r.l., in Italy, could also dedicate part of its work to the non-profit funding of associations dealing with issues related to social justice and access to justice. The topic requires addressing two fundamental legal issues: on the one hand, whether the Italian legal system allows for the – even indirect – funding of litigation without profit purposes; on the other hand, whether Lexcapital's corporate structure permits a potential non-profit activity. Regarding the first issue, it can reasonably be stated that non-profit litigation funding is legitimate within the Italian legal system. Indeed, to date, there is a lack of specific regulation on this point prescribing certain requirements, such as a minimum capital or registration in special registers, for third-party funders of civil or commercial disputes.[4] Therefore, it has been argued that, in principle, even non-profit entities can assume the status of funder, provided that they comply with the regulations governing their proper functioning.[5] It can thus be concluded that, in the Italian legal system, litigation funding by a third-party entity relative to the parties involved in the dispute is permissible, even when the funder carries out its activity without profit purposes. As for the second issue, Lexcapital is classified as a benefit corporation (società benefit). This corporate model was introduced by Law no. 208 of December 28, 2015, under Article 1, paragraphs 376 et seq., and includes all those companies that – in addition to a profit motive – pursue one or more purposes of common benefit and operate in a responsible, sustainable, and transparent manner, promoting activities with a social background for the benefit of people, communities, territories, and the environment.[6] Specifically, the law requires that the corporate purpose of such companies be bipartite: it must therefore provide, on one hand, for the profit-oriented activity that the company intends to exercise, and on the other hand, for the specific benefit activity, i.e., aimed at pursuing social objectives in addition to the traditional activity.[7] In light of these considerations, Lexcapital, identifying itself as a benefit corporation, will be able to carry out, alongside its profit-making activity of acquiring civil and commercial disputes, an activity aimed at guaranteeing access to justice, this time without pursuing a profit. This latter activity can be carried out directly, by directly sponsoring all those individuals who could not otherwise undertake a dispute due to insufficient economic resources[8]; as well as indirectly, by sponsoring organizations that in turn offer legal support in the social sphere to disadvantaged categories of individuals. In fact, as reported above, precisely to maintain its status as a benefit corporation and benefit from the advantages deriving from it, Lexcapital must pursue a purpose of common benefit, which could well be identified in guaranteeing the right of access to justice, constitutionally protected under Art. 24 of the Constitution. In conclusion, to answer the initial question, it can be stated that the model advanced by Therium Access in the United Kingdom can apply to the Italian legal system, since there are no obstacles to the legitimacy of non-profit litigation funding. Furthermore, Lexcapital, having adopted the benefit corporation model, will be able to assume the role of a pioneer company in the sector, undertaking not only an economic activity but also the mission of promoting and facilitating the right of access to justice on a non-profit basis.
[1] https://www.communityjusticefund.org.uk
[2] https://www.theriumaccess.org/news/therium-access-partners-with-other-grant-giving-foundations-to-launch-the-community-justice-fund/
[3] https://www.theriumaccess.org/about-us/
[4] D’Alessandro E. et al., Prospettive del third party funding in Italia/Perspectives on Third Party Funding in Italy, Ledizioni, 2019, p. 32
[5] Ibid
[6] cfr. legge 28 dicembre 2015, n. 208, all’articolo 1, comma 376
[7] Guida P., La riforma del c.d. terzo settore e l’imposizione fiscale delle liberalità indirette. Il modello “società benefit”: analisi strutturale e applicazioni al Terzo settore, Fondazione Italiana del Notariato, available on the website: https://elibrary.fondazionenotariato.it/articolo.asp?art=57/5703&mn=3
[8] Here we refer to the category of individuals whose limited financial resources are not such as to place them in the category of indigent persons who can instead benefit from state-funded legal aid (patrocinio a spese dello stato) as established by Presidential Decree no. 115 of May 30, 2002.
