Five perspectives on third-party funding in arbitration

Five perspectives on third-party funding in arbitration

coverThe task force established in 2013 by the International Council for Commercial Arbitration (ICCA) and Queen Mary University of London (QMUL) to study and make recommendations for regulation of third-party funding (TPF) in international arbitration submitted its draft report for public consultation on 1 September 2017.  LexisNexis UK sought perspectives from five different interviewees.

 As the task force’s draft report recognises, TPF has arrived in a well-trodden landscape.  Insurance of different kinds has been used to fund claims and defences in arbitrations since the 19th century (see James Clanchy’s Blog post   Third-party funding in arbitration: the first 125 years).

The draft report covers the following topics and  proposes ‘principles’ for each of them:

  • conflicts of interest
  • confidentiality and privilege
  • allocation of costs and security for costs
  • best practices
  • TPF in investment arbitration

Funding by insurers was left undisturbed by the recent legislative reforms permitting TPF in arbitration in Hong Kong and Singapore (see the Blog post on the Hong Kong reforms by Yasmin Mohammad of Vannin Capital).  It is one of the surprising features of the task force’s draft report that it  has proposed to bring insurance within its own remit , even including it in definitions of TPF, and to make recommendations for its disclosure in arbitrations.  However, it has also proposed a carve out for maritime arbitration, in which funding by insurers is ubiquitous.

Against this background, LexisNexis UK sought views on the draft report from:

  • an arbitration lawyer, Tim Hardy (CMS Cameron McKenna Nabarro Olswang LLP)
  • a funder, Robert Rothkopf (Balance Capital)
  • a shipping lawyer, Simon Kverndal QC (Quadrant Chambers)
  • a costs insurance broker, Steve Jones (Arthur J Gallagher)
  • a lawyer in Singapore, Barry Stimpson (Reed Smith)

Download the full set of 5 interviews here.

For a free trial of LexisPSL Arbitration, click here.

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