Michael McGrath, the Irish commissioner responsible for democracy, justice, the rule of law and consumer protection, this week closed the Commission’s high-level forum on “justice for growth”.

The forum, which was launched in March, brought together stakeholders including representatives of European organisations and businesses as well as EU member states and institutions.

“Your feedback was that there is currently no need to regulate third-party litigation funding at EU level,” Mr McGrath said at the conclusion of the forum on Tuesday.

“Based on your feedback, the Commission will instead prioritise monitoring the application of the Representative Action Directive in the field of consumer collective redress.”

Third-party litigation funding is generally not allowed in Ireland, though this is currently under review by the Law Reform Commission (LRC).

The LRC carried out a consultation in 2023 and is expected to publish a report on the matter in spring next year.

The International Legal Finance Association (ILFA) has welcomed the European Commission’s decision.

“We’re delighted to see Commissioner McGrath’s clear statement that EU regulation for third-party litigation funding is not planned,” executive director Paul Kong said.

“This appears to close any talk of the need for new regulation, which was completely without evidence and created considerable uncertainty for the sector.

“Over several years, ILFA has consistently made the case that litigation funding plays a critical role in ensuring European businesses and consumers can access justice without financial limitations and are not disadvantaged against larger and financially stronger defendants.

“New legislation would have choked off the availability of financial support to level the playing field for claimants.

“We will continue to work closely with the Commission to share the experiences of our members on the implementation of the RAD across the EU, ensuring it also works for claimants in consumer group actions facing defendants with deep pockets.”