The Chartered Institute of Arbitrators (CIArb) has launched guidelines on third-party funding in arbitration to help promote best practice across the arbitration community.
The guidelines were developed by CIArb’s policy team in collaboration with the Professional Practice Guideline Drafting Committee and a diverse group of arbitration and litigation funding experts from around the world. The guidelines are intended to offer practical insights into the decision-making processes of funders, the types of questions parties should ask and the evolving nature of funding arrangements. It also addresses the broader implications of funding on case strategy, tribunal dynamics and ethical considerations.
The guidelines follow recent judicial initiatives, such as those in the UK, to review the use of litigation funding. They also incorporate proposals for reform in Australia and the US, as well as interest from the European Union.
Mercy McBrayer, the head of arbitration professional practice at CIArb – who drafted the guidelines with Mohamed Sadiq – emphasised the growing relevance of third-party funding in arbitration: “Over the past decade, third-party funding has become an integrated aspect of the arbitration ecosystem. CIArb’s sense is that practitioners are seeking guidance on best practices when parties wish to leverage it as a tool to facilitate dispute resolution.
“We hope these guidelines raise awareness of the various considerations that need to be made when parties choose to use third-party funding in an arbitration and provide a starting point for decision making.”
Dr Hasan Tahsin Azizagaoglu of Bench Walk Advisers, who co-chaired the drafting committee, described the guidelines as “a clear and accessible roadmap for legal practitioners – regardless of their level of experience – to navigate the complexities of third-party funding”.
He added: “The guidelines are unique in their commitment to full transparency, detailing the relevant questions to ask funders, explaining how they make decisions, and shedding light on how funding arrangements evolve behind the scenes. We welcome and value feedback from all practitioners, recognising that individual experiences and preferences regarding litigation funders can differ widely.”
Philippa Charles of Twenty Essex, Azizagaoglu’s co-chair, agreed with this inclusive approach: “We want the guidelines to provide participants in arbitration cases, whether seeking funding or dealing with a funded party, with information and insight about the process of funding and how a case involving a funded party may evolve.”
She added: “While the drafting committee contains representation from practitioners and funders, we are keen to ensure that a multiplicity of viewpoints on these matters is included in the guidelines to make it as useful as possible.”
Industry stakeholders welcomed the guidelines as a timely and valuable contribution. Paul de Servigny, head of litigation finance at Paris-based IVO Capital, commented: “The guidelines are very user-friendly and provide a detailed explanation of the funding process and what clients and law firms should expect.
“A key part of our role is to educate the parties involved in an arbitration about how funding works, and with demand for litigation funding increasing, particularly in EU jurisdictions, these guidelines will be very useful in aligning how the industry talks about funding and will serve as a benchmark for best practice.”
Jeremy Marshall, chief investment officer at Winward Litigation Finance, agreed, praising the clarity of the guidelines: “It is refreshing to read a guide that is so clearly written with the benefit of expert funder input. It will inevitably assist tribunals as they navigate their way through the funders’ world and put to bed any perception of litigation funding being opaque and mysterious.”
The International Legal Finance Association (ILFA) also endorsed the guidelines: “These new guidelines rightly recognise both ILFA members’ rigorous due diligence processes and our self-regulatory standards as examples of industry best practice. We welcome initiatives like this that promote understanding of third-party funding and benefit the arbitration community.”
In addition to Azizagaoglu and Charles, the drafting committee included Dana MacGrath of Arbitra International; Brazilian lawyer and arbitrator, Napoleao Casado Filho; Kathryn Sanger (Herbert Smith Freehills Kramer); Susan Dunn (Harbour Litigation Funding and the Association of Litigation Funders); Camilla Godman of Omni Bridgeway; Viren Mascarenhas, the founding partner at Mascarenhas Law, and formerly a partner at US firm Milbank; Sarah Vasani, formerly co-head of international arbitration at CMS; Ayse Yazir of Bench Walk Advisors; Julian Chamberlayne of Stewarts; and Christopher Bloch of Squire Patton Boggs.
Email your news and story ideas to: [email protected]
