Draft Report of ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration

This draft of the ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration is now available until 31 October 2017. The Task Force is composed of over fifty members from over twenty different jurisdictions around the world, and includes representation of stakeholders from diverse perspectives, including arbitrators, in-house counsel, State parties, external counsel, representatives with experience at arbitral institutions, academics, and a range of third-party funders and brokers. The Task Force aims generally to improve understanding about third-party funding through multi-lateral dialogue about the issues it raises in international arbitration, and to promote greater consistency in addressing these issues. In approaching these aims, the Task Force generally limited its work to those issues that: (1) directly affect international arbitration proceedings; and, (2) are capable of being addressed at an international level. The current draft was assembled from several separate reports that were initially drafted by various Sub-Committees. Those reports and this Draft also benefitted from discussion at multiple roundtable meetings of the Task Force and comments submitted on the various Sub-Committee reports. The Co-Chairs are enormously grateful for all the hard work and careful deliberation of the Task Force Members in producing this Draft. In terms of the structure of this Draft Report, after Chapter One’s general introduction and overview of the Task Force’s work, Chapter Two provides an overview of the market and mechanics of third-party funding. It begins with an examination of the reasons parties seek funding, and the process funders use to evaluate whether to fund a dispute. It then provides a descriptive overview of the range of means for financing disputes, including both modern case-specific non-recourse funding and a range of other sources that serve similar functions. Chapter Three provides a broad working definition and examines different possible definitions, surveys the range of definitions that have been adopted by various other sources, and concludes by examining how different definitions affect analysis of different issues addressed in subsequent chapters. Each of the three subsequent chapters addresses a specific substantive issue, and begins by articulating Principles for each of the following topics: Disclosure and Conflicts of Interest (Chapter 4), Privilege (Chapter 5), and Costs and Security for Costs (Chapter 6). The body of each of these chapters then delineates the sources and competing viewpoints the Task Force considered in reaching these Principles, as well as the reasons why particular viewpoints were eventually incorporated into the Principles instead of others. Chapter Seven summarizes best practices for funding agreements and Chapter Eight examines policy issues that affect third-party funding in investment arbitration.