Assistance With Third Party Funding
Parties to complex litigation or complex arbitration often prefer to rely upon external (i.e., third party) funding of the dispute-settlement process. This means that a financial institution covers the costs of the procedure in exchange for a share of a favourable judgment or award, if secured. Typically, the funder will cover legal fees and arbitration expenses. Sometimes, other costs can also be included.
Originally designed by specialised investment funds to support companies without the necessary own funds, third-party funding is currently offered by a wider range of financial institutions (e.g., various investments funds, investments banks, or insurers) and for various reasons, including risk management or validation of one’s claim. As the litigation finance market matured, various new instruments became available, such as portfolio funding for bundles of claims.
We are one of the few law firms in Central and Eastern Europe with real-life experience in third-party funding, both securing arbitration financing and assisting the funder in their due diligence. We understand the process of third-party funding and the requirements of funders. We accompany our clients in finding and approaching a prospective funder, ‘packaging the claim’, and the following negotiations. We guide our clients through various, less obvious elements of third-party funding such as exclusivity arrangements, settlement constraints and reporting requirements, or the particularities of conflict of interests in third-party funding in international arbitration.
We also handle third party-funded disputes.