Third party funding - an international outlook

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The third party funding market has seen exponential growth in recent years and, with both the number of funders and cases under their management growing year on year, the appetite of the market for good claims to fund shows no signs of diminishing. The International Council for Commercial Arbitration (“ICCA”) has noted that some reports suggest that the global market for dispute funding for arbitration and litigation is estimated to exceed US$10 billion and “rapidly growing”.1

There has also been an influx of capital from investors as a result of the potential for high returns promised by funders, which has driven the recent growth rate of the global legal finance market. A 2017 report by Thomson Reuters suggested that the assets of the top 20 UK litigation funders totalled £723 million.2 Further, increased competition in the market is driving more competitive funding terms, greater risk appetite and jurisdictional diversification. It is in that context that an understanding of how third party funding “works” on an international basis is of paramount importance.

This publication provides a brief overview from the DLA Piper international litigation team on the concept of third party funding and examines the current position of third party funding in the following jurisdictions which will be relevant to many disputes:

  • Australia
  • Canada
  • China
  • England and Wales
  • France
  • Hong Kong
  • Singapore
  • United Arab Emirates

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1 Report of the ICCA-Queen Mary Task Force on Third Party Funding in International Arbitration, The ICCA Reports No. 4 (April 2018) (the ICCA-Queen Mary Report), p. 17

2 Thomson Reuters Release: UK’s Biggest Companies Face a Rising Tide of Litigation – Number of High Court Cases for FTSE100 More Than Doubles (2017)