LITIGATION FUNDING DEVELOPMENTS IN ASIA
CD: How would you describe the litigation funding market across Asia? What do you consider to be the most significant developments to have emerged in this space in recent months?
Bowman: The two jurisdictions in Asia on which third-party litigation funders are primarily focused are Singapore and Hong Kong. They have robust and transparent legal systems which are based on English common law, transact in English, have a well qualified legal bar and a volume of insolvency and arbitration proceedings. However, these jurisdictions still retain, as part of their law, the ancient principles of maintenance and champerty. Subject to various exceptions developed over time, these rules prohibit third-party funding. The most significant developments to emerge in this space lately are the continuing erosion of the applicability of these rules, in the form of proposed legislation in Singapore permitting litigation funding in arbitration, recommendations in Hong Kong by a subcommittee of the law reform commission to the same effect and an emerging line of cases in which the courts have sanctioned litigation funding agreements for insolvency practitioners.
CD: Could you outline the benefits that litigation funding can bring to businesses operating in Asia? Is it more suited to certain types of cases?
Bowman: Litigation funding allows plaintiffs with legitimate claims to pursue them. In many instances, the funder also agrees to meet any adverse costs ordered. The funder brings to the litigation a war chest, to enable the playing field to be levelled. It also brings a level of experience and commerciality to the litigation process. For plaintiffs with the capacity to fund their own cases, litigation funding offers risk mitigation or risk management opportunities. It is not suited to cases where there is not a substantial claim sounding in money – an example might be an application for declaratory relief – or where there are significant concerns over the defendant’s capacity to pay.
Oct-Dec 2016 issue
IMF Bentham Limited