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The role of private actors in asset recovery

The growing use of private litigation funding

Among the many barriers to asset recovery, the lack of funding is a prominent challenge. Destination countries, on the one hand, are often criticised for not allocating sufficient resources to prevent corrupt actors from hiding and laundering stolen assets and the proceeds of corruption in their territories. Origin countries seeking to recover assets located abroad, on the other hand, often lack funding to support complex and intricate international legal assistance proceedings. More and more countries are attempting to recover illegally obtained assets through private proceedings based on civil lawsuits, which can be faster and more efficient than the criminal avenue based on international cooperation, and yet are considerably more expensive.

20 December 2021
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Main points

  • Origin countries increasingly use private lawsuits based on civil proceedings to recover assets.
  • Providing many valuable advantages, the civil route nonetheless comes with high litigation costs.
  • The involvement of private actors who bear the litigation costs of asset recovery cases appears to be one option to address this funding issue.
  • Private litigation funding in asset recovery remains scarcely regulated, which gives rise to risks of conflict of interest and opacity.
  • Alongside a growing role for traditional models of private litigation funding, more novel practices, such as the sale of claims by origin countries to groups of investors, also appear to be on the rise, which brings additional risks and challenges to the integrity of the process and may, ultimately, undermine the whole asset recovery process and reinforce public distrust in measures to counter corruption.

Cite this publication


Brimbeuf, S.; (2021) The role of private actors in asset recovery. Bergen: U4 Anti-Corruption Resource Centre, Chr. Michelsen Institute (U4 Helpdesk Answer 2021:25)

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Sara Brimbeuf

Disclaimer


All views in this text are the author(s)’, and may differ from the U4 partner agencies’ policies.

This work is licenced under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International licence (CC BY-NC-ND 4.0)

Keywords


asset recovery, private sector, illicit financial flows