Search Your Queries Related To Trilegal

Third-Party Funding: Treading on Thin Ice?

28 Aug 2023

Trilegal X Asian Legal Business Image
By: Payel Chatterjee (Partner) and , Aman Singhania (Senior Associate), Bharatt Goel (Associate)

This piece was originally published on the Kluwer Arbitration Blog.

Third-Party Funding (“TPF”) has emerged as a parallel industrial complex in the modern dispute resolution landscape. Parties routinely enter into Arbitration/ Litigation Funding Agreements (“LFA”) with third parties, based on both conditional fees and damages-based remuneration models, seeking financial services in relation to advocacy, litigation, or claims management. The increasing popularity of the industry can be accredited not only to its commercial viability especially in contentious commercial arbitrations, as evidenced by a ten-fold increase in funders’ assets in the United Kingdom (“UK”) alone, a whopping £ 2.2 billion over the past decade, but also to its stead-fast socio-legal acceptability as a tool for enabling access to justice as well.

Initially, TPF was met with scepticism, and was excluded on grounds of public policy and to avoid unwarranted interferences with the process of justice. Acceptance came gradually; LFAs which did not entail wanton meddling with the process of justice or did not accord disproportionate control or profits to third parties, were deemed to pass the litmus test of maintenance and champerty rules. International and domestic arbitrations guided by principles of party autonomy and addressing commercial interests of private parties, naturally became the most lucrative and acceptable forums for introducing TPF. A typical look of courts attempting to balance commercial and social values of TPF was seen in the landmark case of Excalibur Ventures LLC v. Texas Keystone Inc (no. 2). While on one hand, TPF was acknowledged as a judicially sanctioned activity in public interest, on the other hand, joint and several liability was enforced upon inexperienced funders for adverse indemnity costs.

Download PDF to read more

Trending News


Under the rules of the Bar Council of India, Trilegal is prohibited from soliciting work or advertising in any form or manner. By accessing this website,, you acknowledge that:

  • You are seeking information about Trilegal of your own accord and there has been no form of solicitation, advertisement or inducement by Trilegal or its members.
  • This website should not be construed as providing legal advice for any purpose.
  • All information, content, and materials available on this website are for general informational purposes only.
  • Any information obtained or material downloaded from this website is completely at the user’s volition, and any transmission, receipt or use of this website is not intended to, and will not, create any lawyer-client relationship.
  • Information on this website may not constitute the most up-to-date legal or other information. Trilegal is not liable for the consequences of any action taken by any person based on any material or information available on this website, or for any inaccuracy in or exclusion of any information or interpretation thereof.
  • Readers of this website or recipients of content or information available on this website should not act based on any or all such content or information, and should always seek advice of competent legal counsel licensed to practice in the appropriate jurisdiction.
  • Third party links contained on this website re-directing users to such third-party websites should neither be construed as legal reference / legal advice, nor considered as referrals to, endorsements of, or affiliations with, any such third party website operators.
  • The communication platform provided on this website should not be used for exchange of any confidential, business or politically sensitive information.
  • The contents of this website are the intellectual property of Trilegal.

We prioritize your privacy. Before proceeding, we encourage you to read our privacy policy, which outlines the below, and terms of use to understand how we handle your data:

  • The types of information we collect and why we collect them.
  • How we use your information to provide a personalized experience.
  • The measures we take to ensure the security of your data.
  • Your rights and choices in managing your personal information.
  • How we may share information with trusted partners for specific purpose.

For more information, please read our terms of use and our privacy policy.

Up arrow