Abstract
Third-party funding (TPF) has expanded significantly in recent years, and in the process, it has generated considerable controversy, particularly as it has been used in the context of investor-state dispute settlement (ISDS). This chapter briefly outlines the policy debate. Those who support the use of TPF generally frame that debate as one of access to justice. Under this view, TPF enables claimants who have good claims, but little money, to finance the cost of bringing that claim to an arbitral venue. Detractors argue that TPF shifts the historic focus of the case from the client’s interest to the funder’s interest, making return on investment the key metric for bringing such claims. The ICCA—Queen Mary Task Force on Third-Party Funding has begun the process of identifying and assessing these competing interests, and it has suggested a number of best practices based on its work. Undoubtedly, the ground rules for TPF will be subject to change as the market gains more experience with it. In the meantime, this chapter offers some pragmatic suggestions that may be helpful to parties in implementing TPF in the resolution of disputes.
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Notes
- 1.
See in this volume, chapter by José Ángel Rueda-García, Third-party funding and access to justice in investment arbitration: security for costs as a provisional measure or a standalone procedural category in the newest developments in international investment law.
- 2.
Guven and Johnson (2019), p. 4 (emphasis in original).
- 3.
OGEMID discussion thread (2019), at https://www.transnational-dispute-management.com/members/ogemid/2019/05/msg00083.asp?highlight=eucj.
- 4.
OGEMID discussion thread (2019), at https://www.transnational-dispute-management.com/members/ogemid/2019/05/msg00083.asp?highlight=eucj.
- 5.
Garcia (2018), p. 2924.
- 6.
Garcia and Hough (2019).
- 7.
Santosuosso and Scarlett (2018), p. 6.
- 8.
Guven and Johnson (2019), p. 23, citing the work of Krzystof Pelc: “[M]ost respondent countries are not rent-seeking regimes with low rule of law, but stable democracies with independent judiciaries.”
- 9.
Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (2018), p. 5, fn. 12, citing from Sebastien Perry, Third-Party Funding: The Best Thing Since Sliced Bread?” (GAR, November 2012).
- 10.
Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (2018), pp. 236–237.
- 11.
Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (2018), Chapter 7.
- 12.
See, e.g., Franck (2019), p. 311, fn. 71.
- 13.
Guven and Johnson (2019), p. 30.
- 14.
Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (2018), p. 25.
- 15.
Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (2018), p. 26.
- 16.
It may also serve to stretch a potentially meritorious, but relatively small, claim into a much larger, but manifestly less meritorious claim.
- 17.
See in this volume chapter by María Beatriz Burghetto, Risk assessment and third-party funding in investment arbitration.
- 18.
Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (2018), p. 25.
- 19.
Report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration (2018), p. 27.
- 20.
- 21.
Bühler (2017), Chapter 18.
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Walck, R.E. (2021). A Quantum Expert’s Perspective on Third-Party Funding. In: Fach Gómez, K. (eds) Private Actors in International Investment Law. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-48393-7_8
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