ABSTRACT
The arbitration process invariably involves costs and expenses usually broadly classified into; cost of the award and cost of reference eg arbitrator’s fees, costs of hiring the venue of arbitration, costs of stenography (where a stenographer has been contracted), legal fees of advocates employed etc. These costs are borne by the parties to the arbitration process.
In a bid to meet these onerous costs parties to the arbitration process seek alternative ways. This sometimes involves third-party funding. This discourse seeks to critique: the legality of third-party funding in arbitration, the necessity to legislate on third-party funding in arbitration, and the pros and cons of third-party funding in arbitration, especially in common law jurisdictions.
Third-party funding is more often than not considered and/or juxtaposed with the common law doctrines of champerty and maintenance existing in litigation. These two doctrines are considered to define illegal agreements in litigation involving third-party funding in common law jurisdictions. Lord Justice Steyn in Giles v Thompson defining the doctrines of champerty and maintenance existing in litigation opined as follows verbatim: ‘… in modern idiom maintenance is the support of litigation by a stranger without just cause. Champerty is an aggravated form of maintenance. The distinguishing feature of champerty is the support of litigation by a stranger in return for a share of the proceeds”.
Premised on the foregoing, inquisitively, this discourse questions whether third-party funding in arbitration in common law jurisdictions amounts to champerty and maintenance.
Muriithi, Peter, Champerty and Maintenance: The Legality of Third-Party Funding in Arbitration in Common Law Jurisdictions (April 2, 2022). Alternative Dispute Resolution Journal, volume 10, issue no 1, 2022, Chartered Institute of Arbitrators-Kenya Branch (CIArb-K).
First posted 2022-05-04 13:00:49
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