Gamblers, Loan Sharks & Third-Party Funders

ETHICS IN INTERNATIONAL ARBITRATION (Oxford University Press, 2014) (Forthcoming)

Penn State Law Research Paper No. 51-2013

51 Pages Posted: 27 Oct 2013 Last revised: 28 Jan 2014

See all articles by Catherine A. Rogers

Catherine A. Rogers

Pennsylvania State University, Penn State Law; CCLS, Queen Mary University of London

Date Written: October 27, 2013

Abstract

International arbitration is proving to be an irresistible allure for third-party funders. International arbitration cases are particularly attractive because of the prevalence of high-value claims, the speed of proceedings, the potential for reduced evidentiary costs and streamlined procedures, the ability to control variables such as expertise of the decisionmaker, the potential for legal arbitrage to avoid national restrictions on such funding, and the highly enforceable nature of arbitral awards. As a result, third-party funding seems to be a permanent fixture in international arbitration. Their increasing presence, however, raises a host of complex legal and ethical questions that can affect all various actors, most notably counsel and arbitrators, as well as the larger framework of the international arbitral regime.

Notwithstanding their potential impact, the very definition of third-party funders and the mechanics of how they operate remains largely unknown. Adding to this uncertainty, third-party funders in international arbitration are uniquely untethered from any formal or national professional regulation or national mandatory laws. Meanwhile, ambiguities about counsel ethics in international arbitration and funder participation in arbitrator selection raise peculiar dilemmas that have few ready answers. Debate has begun, but to date, careful analysis of and specific proposals in response to these complex issues has been lacking.

This book chapter provides one of the first sources to undertake sustained analysis of the the peculiar quandaries raised by the presence of third-party funding in international arbitration and suggest concrete solutions. As a chapter in a forthcoming book ETHICS IN INTERNATIONAL ARBITRATION (Oxford University Press, 2014), it examines how issues relating to third-party funders should be integrated into a larger regime of self-regulation of professional conduct in international arbitral proceedings.

Keywords: third-party funding, alternative litigation funding, international arbitration, ethics, professional responsibility, ethical regulation, legal profession

JEL Classification: K41, K33

Suggested Citation

Rogers, Catherine A., Gamblers, Loan Sharks & Third-Party Funders (October 27, 2013). ETHICS IN INTERNATIONAL ARBITRATION (Oxford University Press, 2014) (Forthcoming); Penn State Law Research Paper No. 51-2013. Available at SSRN: https://ssrn.com/abstract=2345962 or http://dx.doi.org/10.2139/ssrn.2345962

Catherine A. Rogers (Contact Author)

Pennsylvania State University, Penn State Law ( email )

Lewis Katz Building
University Park, PA 16802
United States

CCLS, Queen Mary University of London ( email )

Charterhouse Square
London, EC1M 6AX
United Kingdom

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