Litigation Funding in Arbitration: Three Recent Developments

July 30, 2019
Each month, we aim to update the legal community on issues related to litigation funding in Canada, and also on broader news in the industry. This month, we cover three developments in the arbitration space. 

First, the Canadian Arbitration and Mediation Journal has just published an excellent article exploring a number of the legal and ethical considerations for litigation funding in arbitration. The article, by Rachel Howie and Jessica Gill at Dentons, can be viewed here

Second, Canada will soon provisionally apply the Comprehensive Economic and Trade Agreement (CETA) with Europe. A little reported provision of CETA is Article 8.26, entitled “Third Party Funding”. This provision requires parties to advise the arbitral tribunal if they have litigation funding, and provide the name and address of the funder. This provision will not likely come into force until a later date, but its inclusion reflects the growing role that litigation funding plays in arbitration.

Third, earlier this month, Hong Kong’s Legislative Council passed long-awaited legislation expressly permitting third party funding for arbitration, mediation and related court proceedings in Hong Kong. On recommending its adoption, Hong Kong’s Secretary for Justice advised that the purpose of the legislative change is to “enable Hong Kong’s dispute resolution regime to stay at the forefront among major dispute resolution and financial centres around the world.” 

These three developments reflect the growing role that litigation funding plays in arbitrations. It is also consistent with our experience at Bentham Canada: we have reviewed seven arbitration cases across the country to date, and expect this number to increase as awareness of litigation funding in Canada becomes more prevalent.

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