Charles Adams Discusses Third-Party Funding in International Arbitration

Charles Adams, the leader of Orrick’s International Arbitration & Dispute Resolution team, recently spoke with Law360 regarding international arbitration trends to watch in 2018. Charles discussed the increased legitimization of third-party funding in international arbitration, which looks set for wider acceptance in 2018 after Hong Kong and Singapore both passed legislation clarifying that third-party funding is legal.

According to Charles, "It's an idea that is gaining breadth across the spectrum of the international business community. It's not merely small companies that don't have the wherewithal to assert what otherwise are meritorious claims.”

There are concerns that third-party funding affects access to justice and increases the number of frivolous claims. However, Charles noted that jurisdictions looking to become or remain international arbitration hubs will have to make clear their position on third-party funding.

"It's driven by the fact that international arbitration is big business," he said. "Places that want to get their piece of the action have to make sure that economic realities are recognized ... and that there's no disincentives to arbitration in the particular venue. That's why third-party funding is increasingly legitimized and unchallenged."