INTERNATIONAL ARBITRATION 1/3LY
THE RANGE OF C A SES WE ARE APPROACHED ABOUT, THE LE VEL OF QUANTUM AND THE COS T INVOLVED I S RE ALLY DI VERSE AND I THINK THAT I S A DEMONS TRAT ION OF THE INTERES T IN FUNDING ALL AROUND.
K E Y T RENDS IN T HI RD - PA R T Y F UND ING
ROSEMARY There is no doubt that certain jurisdictions aremore alive to funding and the benefits of it than others, both from impecunious claimants andwell 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 themoment, 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 themabout funding within the last 12-15months and the desire for clients to knowmore is also reallymarked. I think people are realising that funding is not the preserve of the impecunious claimant anymore. There’s real benefit to well capitalised claimants deploying funding as ameans 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, froma cost centre to profit centre, or froma 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 inmind. I’ve had some lawyers in private practice say tome 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.
KE I TH In terms of comparing and contrasting between regions, theMiddle East is verymuch in its infancy in terms of the use of funding. For themoment, it ismore of an educational enterprise and I’msure in time it will lead on to more funded cases, both in arbitration and litigation. Which regionwould you say is themost mature and howare they doing things differently? ROSEMARY Australia is definitely themost developed as a fundingmarket. However, it is really only developed in two respects; insolvency and group litigation. I actually think the UKmarket steals amarch on Australia in terms of funding casesmore broadly and therefore on usingmore 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 away to fund portfolios and specific baskets of claims I have no doubt that law firms and clients in other jurisdictions will quickly catch upwith the UK, especially in the arbitration context where it is such a connected global community.
KE I TH 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 themajority 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. Frommy experience, people are thinking about funding inmost investment treaty cases and in all of themajor 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 quantumof GBP 5million. We are seeing claims ranging from this bottom threshold all the way up to GBP billion arbitrations whichwill last five to six years with budgets in excess of USD 10million. KE I TH Are you seeing any trends regarding different jurisdictions?
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