As India weighs how to modernize the financing of disputes, senior advocate Mahesh Agarwal has staked out a clear position: third-party litigation funding should be formally recognized, but lawyers should not be permitted to take a financial stake in the cases they handle. His comments add a prominent voice to a growing debate over how far India's legal market should go in embracing outside capital.
As reported by Bar and Bench, Agarwal drew a sharp distinction between third-party funding and lawyer participation in outcomes. While supportive of recognizing litigation funding as a legitimate, separate mechanism, he firmly opposed success fees for attorneys, saying, "a lawyer or a law firm getting involved or taking a stake in the litigation, I think we are not that mature as of now."
His concern centers on professional integrity, with Agarwal arguing that India's legal system is not yet equipped to manage arrangements in which attorneys profit directly from the results they secure for clients. The distinction mirrors the approach taken in several jurisdictions that permit third-party funding while restricting contingency-style lawyer compensation.
Agarwal also voiced unease about the state of Indian arbitration, observing that it "has lost respect" amid mounting delays and challenges, and suggested mediation may prove more effective for resolving commercial disputes. He further criticized "no order as to costs" practices that allow parties to litigate without financial consequence, encouraging prolonged and frivolous disputes. Taken together, his remarks frame litigation funding as a tool that could strengthen access to justice in India, provided it is introduced with appropriate guardrails.