Woodsford’s Public Submission to UNCITRAL
On Friday 30th July 2021, Woodsford delivered a considered public submission to UNCITRAL in respect of the Secretariat’s draft provisions on the regulation of third-party funding in Investor-State Dispute Settlement.
“Woodsford respectfully disagrees with the Working Group’s belief that further regulation of third-party funding is necessary.“
“Various jurisdictions that have actively considered the question of how much (if any) regulation of third-party funding is necessary have often concluded not to implement such regulation. Singapore and Hong Kong introduced legislation in 2017, following considerable consultation, to permit third-party funding in respect of arbitration proceedings. As part of that process, the need (or otherwise) for government-led regulation was considered, but not adopted.
As recently as last month (June 2021), Singapore further liberalised its third-party funding regime to permit funding of to cover certain proceedings in the Singapore International Commercial Court (SICC), domestic arbitration proceedings and related mediation proceedings. Referring to the 2017 legislation, the Singapore Ministry of Law stated, “Funders and the business, legal and arbitration communities …responded positively … and businesses have shown increasing interest in additional options for financing litigation.”
In January 2017, Lord Keen of Elie, speaking on behalf of the UK government, stated that “the market for third-party litigation funding remains at a relatively early stage in its development in this jurisdiction and we are not aware of specific concerns about the activities of litigation funders” and “the last Government gave Parliament an assurance that it will keep third party litigation funding under review and this Government is ready to investigate matters further should the need arise.” Since then, the UK government has not proposed or introduced any government-led regulatory regime in relation to third party litigation funding, which implies that the UK government considers, quite rightly in our view, that the “need” has not arisen.
Further, despite third party funding now being a well-established industry, there have been remarkably few disputes between funders and their funded counterparts or reported problems when compared to other financial industries. We would therefore urge caution when deciding whether or not to regulate an industry which has demonstrated no need for regulation.”
You can read Woodsford’s full submission here.