Commercial Arbitration Funding: Code of Conduct

The code is self-regulatory with the intention of unifying funders to adhere to one set of boundaries. And to make funding for arbitration easier to understand and regulate for consumers.

This code is voluntary amongst commercial arbitration funders in England and Wales as well as arbitrators in those areas. Response to the invention of the code has been mixed. Whilst many have welcomed the attempt to impose boundaries on commercial arbitration funding practices other feel it isn’t tough enough and lacks detail.

Whilst the high financial rewards tempt funders, those looking for funding reap additional rewards. As well as financial support, access to additional legal support and advice is often also on the table. This additional support not only aids the party involved in the dispute but also funder as strengthening the legal backbone of a case, will in turn increase its chances of success. Commercial arbitration funding is still very much a developing industry. The process involves third party funders who are in no way connected to either party involved in the dispute providing financial support as a means of making a profit on their investment once the dispute is settled. Some funders will seek their fee as a percentage of a claimant’s overall settlement if the case is successful. Those whose cases aren’t successful are not liable for the investment contribute by the funder, it is the risk they take.