Guide To Litigation Funding In The Cayman Islands 2025

This country-specific guide to litigation funding in the Cayman Islands focuses on the legal and regulatory framework, adverse costs and insurance, lawyer ethics, and taxes.

1. Legal and Regulatory Framework for Litigation Funding

1.1 Legality of Litigation Funding

Litigation funding is generally permissible in the Cayman Islands following the enactment of the Private Funding of Legal Services Act (2020 Revision) (“PFLSA”), which modernised the legal framework and clarified the permissibility of third-party funding arrangements.

Prior to the coming into force of the PFLSA on 1 May 2021, maintenance and champerty were considered both criminal offences and civil wrongs (torts) in the Cayman Islands. Maintenance is the improper support or litigation by a third party who has no legitimate interest in the case. Champerty is an aggravated form of maintenance where the third party provides financial assistance in return for a share of the proceeds if the case is