Volume 33 (2016) / Issue 1
Common law jurisdictions have traditionally been averse to the notion of third party funding (‘TPF’) due to the ancient doctrines of champerty and maintenance. Founded on considerations of public policy, the laws of champerty and maintenance were targeted at frivolous and vexatious claims ‘fomented and sustained by unscrupulous men of power’. While common law jurisdictions such as the United Kingdom and Australia have removed prohibitions on TPF in arbitration, other common law jurisdictions are less eager to follow suit. In this article, the author argues that TPF in international arbitration should not be prohibited, but regulated, as it levels the playing field for claimants who are either impecunious or unable to bear the associated financial risks due to their limited financial resources. It examines the various arguments presented against TPF, such as the encouragement of frivolous claims, the control of the claim and conflict of interests, while also proposing various measures to curtail the risks of a slippery slope from TPF.
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