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Report on third-party funding in international arbitration released for public comment

UNIVERSITY PARK, Pa. – A global task force of the International Council for Commercial Arbitration (ICCA) and the School of International Arbitration at Queen Mary University of London has released for public comment a draft of its report on third-party funding in international arbitration. The task force is co-chaired by Catherine A. Rogers, professor of law and Paul and Marjorie Price Faculty Scholar ​at Penn State Law.

The 177-page draft report of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration was published on Sept. 1 and is available for public comment until Oct. 31. During the public comment period, the task force will be hosting or co-sponsoring a range of public and invitational events around the world to facilitate discussion of the draft and solicit feedback from different communities. The final version of the report will be unveiled at the ICCA Congress in Sydney in April 2018.

Third-party funders are playing an increasingly prominent role in international arbitration, with more and more entities financing disputes in return for a portion of the proceeds from a successful case. The financing is coming from insurance companies, investment banks, hedge funds as well as specialized institutions that focus solely on investing in arbitral disputes, and on occasion even non-governmental organizations. Funders cumulatively have many billions of dollars that they are ready to spend on legal services to pursue claims around the world, and increasingly international arbitration disputes are drawing some of that funding.

Such funding can provide access to justice for parties who cannot afford to bring a claim, but it also raises several concerns, including potential conflicts of interest between funders, arbitrators, parties, and counsel, transparency, privilege, and disclosure issues, and questions about costs and security for costs, among others. The task force’s report puts forth recommendations to preserve the effectiveness and legitimacy of international commercial arbitration. Its focus is on those issues that most directly affect arbitration proceedings, namely the impact of third-party funding on costs and security for costs, attorney-client privilege, and conflicts, together with overarching chapters on definitions, best practices, and policy issues in investment arbitration.

Mick Smith, partner a co-founder of Calunius Capital and a member of the task force, recently told Global Arbitration Review that a focus of the report was to provide a "procedural toolkit" for arbitrators in dealing with third-party funding issues.

"When tribunals and procedural orders don't make reference to these issues such as disclosure, to some extent the parties are approaching a vacuum as to what they should do,” he said. “It is much easier for them to respond to specific requests. We are trying to put a sensible framework in place that arbitrators can implement as part of a process."

The task force consists of more than 50 arbitrators, attorneys, law professors, and other leading international arbitration experts from around the globe. In addition to Rogers, the task force’s co-chairs are Stavros Brekoulakis, professor of international arbitration and commercial law at Queen Mary, and William W. (Rusty) Park, professor of law at Boston University School of Law.

Feedback on the report can be emailed to the task force co-chairs at Public comments on the draft report can also be posted and viewed at

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