Current Market Conditions
The litigation finance sector in Italy is undergoing a phase of significant expansion, attracting a growing number of institutional and private stakeholders. Structural reforms to the judiciary—coupled with accelerated proceedings, comprehensive digitization, and the establishment of specialized chambers—have consolidated Italy’s position as an increasingly attractive jurisdiction for litigation funding.
The country now offers a robust and efficient judicial system, with civil proceedings reaching timelines comparable to, and in some instances exceeding, the European average in terms of procedural speed and digital efficiency. Italy stands out as one of the few jurisdictions where court filings and evidentiary submissions are handled entirely through digital platforms. This technological maturity, combined with disciplinary provisions sanctioning judges who fail to meet procedural deadlines and the recognition of the right to compensation for judicial delay, has further strengthened investor confidence.
The market is also supported by a legal framework that, while still evolving, has seen important developments. Notably, the transposition of EU Directive 2020/1828 through Italian Law No. 28/2023 has implicitly confirmed the admissibility of third-party litigation funding (TPLF) under Italian law—thus marking a turning point in the regulation and acceptance of litigation finance as a legitimate investment asset class in Italy.
Key Deals and Capital Deployed
The first quarter of 2025 has already seen a flurry of high-profile and diversified funding transactions, with over €300 million in committed capital across multiple investment strategies. Among the most noteworthy:
- A B2B collective antitrust follow-on case in Italy, with €30 million committed by two international funds. Case aggregation has commenced, and four collective proceedings are expected to be filed within the year.
- A separate B2B antitrust action set to be filed in Germany, backed by a €50 million funding line. Italian claimants are currently being aggregated.
- A personal injury portfolio, comprising 400 to 600 individual claims (95% related to medical malpractice), financed through a €6 million club deal involving high-net-worth individuals. Litigation will be consolidated into a single proceeding in Italy.
- Two large-scale environmental damage cases, currently estimated to exceed €2 billion in claim value. The commercial effort aims to gather 40,000 B2C claimants and will proceed through multiple waves of litigation within Italian courts.
- A structured initiative targeting 50 to 100 high-value corporate single claims, with a capital allocation of €50–70 million. The litigation, predominantly domestic, will include both court and arbitral proceedings.
- A multi-claim platform under development—comprising both B2B and B2C elements—supported by €100–125 million in capital. Aggregation is ongoing and litigation is scheduled for 2025–2026 in coordination with leading domestic and international legal teams.
- A €100–150 million commitment to finance special situations, including insolvency-linked claims, director and auditor liability actions, and post-bankruptcy residual receivables.
Regulatory Framework and Legal Considerations
While Italy lacks a dedicated statute governing litigation funding, its legal system offers sufficient clarity and operational leeway for properly structured transactions. Pursuant to Article 106 of the Italian Banking Act (TUB – Legislative Decree No. 385/1993), only entities authorized and registered with the Bank of Italy may engage in the professional granting of credit or purchase of claims. However, recent case law has nuanced this interpretation.
Notably, the Italian Supreme Court, reaffirmed by Ruling No. 13749/2024, has stated that a professional assignment of claims—absent any payment of consideration—does not amount to a financial activity and may be deemed valid under civil law even when executed by an unauthorized entity. This has opened the door for the expansion of claim assignments without upfront payment as a legally viable model.
Conversely, where transactions involve partial or full advance payments, or are carried out on a recurring and structured basis, they fall squarely within the scope of regulated financial activities, thus requiring proper licensing. The risks associated with operating outside this framework include nullity of the funding agreements and potential administrative or criminal liabilities. For these reasons, cautious investors prioritize the use of authorized structures—such as regulated intermediaries, alternative investment funds (AIFs), or securitisation vehicles—to ensure full compliance and enforceability.
Single Claims – A Scalable Frontier
The segment of high-value single claims is gaining increasing traction, particularly in commercial disputes involving Italian companies. These include breach of contract, patent infringement, and liability actions governed by either domestic or international law.
Historically, Milan’s commercial arbitration tribunals have already attracted foreign investment for one-off cases. More recently, investor interest has expanded to encompass claims linked to bankruptcies and director liability.
In 2025, a new campaign will be launched to aggregate up to 100 corporate claims, with a budget allocation of €50–75 million. This initiative reflects a broader trend toward scalability, driven by technological innovation that significantly reduces abortion costs and increases the feasibility of standardized due diligence processes across numerous single-claim investments.
Technological Integration and Automation
Technology now plays a central role in litigation finance operations, particularly in the context of case aggregation and evidentiary preparation. The integration of advanced OCR engines with large language models (LLMs) allows for the automated extraction and classification of data from documentary evidence at near-zero error rates.
Italian litigation funders are increasingly relying on AI to support claim vetting processes. One prominent example is a personal injury finance operator that has partially automated its case selection system and plans to develop a fully autonomous claims resolution platform.
Automation, combined with Italy’s fully digitized judicial infrastructure, is not only increasing operational efficiency but also enhancing the strategic viability of single claims as an investable asset class.
Pipeline of Collective Actions
The upcoming year will also see the expansion of collective litigation, both in corporate and consumer domains:
- Five antitrust B2B follow-on actions, with estimated damages ranging from €150 million to over €1 billion, and individual funding tranches from €5 million to €50 million.
- Four consumer-oriented collective actions in advanced stages of development.
- Three tech-sector cases originating in U.S. and U.K. courts, now being adapted and mirrored for filing in Italian jurisdictions.
The assignment model is emerging as a pragmatic alternative to the EU representative action regime, particularly in consumer cases. Given the limited financial returns currently available to funders under the Directive’s implementation (e.g., restrictions on sharing success-based fees), the transfer of claims offers greater flexibility and alignment with private capital expectations.
Strategic Outlook and Investment Implications
Italy has rapidly transitioned from a developing litigation finance market to one of the most dynamic and strategically relevant jurisdictions in Europe. The influx of foreign capital, emergence of sector-specific AIFs, and increasing sophistication of domestic operators signal a maturation of the market ecosystem.
The second half of 2025 is expected to see further consolidation, including the closing of capital raising rounds for litigation finance firms and expansion of partnerships with financial institutions previously focused on non-performing loans. Italy’s alignment with EU regulatory standards—combined with its structural reform agenda—positions it as a jurisdiction of reference for collective redress mechanisms and litigation-backed investment strategies.
In summary, the Italian litigation finance market today offers a rare combination of favorable legal architecture, operational scalability, and economic upside. For institutional investors, litigation funders, and strategic partners, 2025 represents not only a year of strong momentum—but the foundation for long-term market leadership.