INTERNATIONAL ARBITRATION 1/3LY
THE RANGE OF CASES WE ARE APPROACHED ABOUT, THE LEVEL OF QUANTUM AND THE COST INVOLVED IS REALLY DIVERSE AND I THINK THAT IS A DEMONSTRATION OF THE INTEREST IN FUNDING ALL AROUND.
KEY TRENDS IN THIRD-PARTY FUNDING
ROSEMARY There is no doubt that certain jurisdictions are more alive to funding and the benefits of it than others, both from impecunious claimants and well capitalised claimants. For example, the UK is growing at a rate of knots. In addition, funding in the offshore jurisdictions, especially in the insolvency context, is also growing rapidly. At the moment, there is an increasing interest regarding funding in Hong Kong and Singapore despite the current legislation. TPF is currently unlawful because of maintenance and champerty rules (except in the context of insolvency), but the level of interest is high. In Dubai, I have been approached by numerous law firms and clients to educate them about funding within the last 12-15 months and the desire for clients to know more is also really marked. I think people are realising that funding is not the preserve of the impecunious claimant any more. There’s real benefit to well capitalised claimants deploying funding as a means to totally de-risk the costs of bringing a claim for them. It means that they can bring a claim at no cost to themselves and enjoy the upside benefit of it. By using funders, claimants do not need to worry about the impact of the cost of the litigation on their balance sheets, on cashflow, or on their legal spend. Using a slightly ‘buzz phrase’, we would go so far as to say it turns the claim, from a cost centre to profit centre, or from a liability into an asset. Some would say that’s taking it a bit too far, but it’s an important consideration that well capitalised claimants to bear in mind. I’ve had some lawyers in private practice say to me that, they now think it is their obligation, to offer or at the very least think about funding for every claimant case they act in.
KEITH In terms of comparing and contrasting between regions, the Middle East is very much in its infancy in terms of the use of funding. For the moment, it is more of an educational enterprise and I’m sure in time it will lead on to more funded cases, both in arbitration and litigation. Which region would you say is the most mature and how are they doing things differently? ROSEMARY Australia is definitely the most developed as a funding market. However, it is really only developed in two respects; insolvency and group litigation. I actually think the UK market steals a march on Australia in terms of funding cases more broadly and therefore on using more innovative forms of funding. One example of this is that in the UK, for some, the attitude has changed from ‘let’s fund this one case, get the return and then think about the next case when that comes along’, to clients and their lawyers looking at funding as a way to fund portfolios and specific baskets of claims I have no doubt that law firms and clients in other jurisdictions will quickly catch up with the UK, especially in the arbitration context where it is such a connected global community.
KEITH Let’s discuss trends. What are the trends you are seeing in the kinds of cases that are being presented to you for funding? Are the majority arbitration or litigation? ROSEMARY I believe the key trend is a real growth in knowledge and keenness to use funding for disputes, regardless of the type. I have noticed an exponential rise in approaches to us for funding for arbitration cases and for litigation across the board. From my experience, people are thinking about funding in most investment treaty cases and in all of the major centres for commercial arbitration. Litigation funding is across all facets, including financial disputes, professional negligence, breach of trust and insolvency cases. The range of cases we are approached about is really diverse. Our minimum threshold for funding a case is a quantum of GBP 5 million. We are seeing claims ranging from this bottom threshold all the way up to GBP billion arbitrations which will last five to six years with budgets in excess of USD 10 million. KEITH Are you seeing any trends regarding different jurisdictions?
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