Following positive feedback from arbitration communities and global businesses alike, the Law Ministry (MinLaw) announced on 10 October that the permissibility of third-party funding will be extended to include domestic arbitration, certain proceedings in the Singapore International Commercial Court and mediations connected with these proceedings.
What does this mean for lawyers and corporations operating in Singapore?
The introduction of third-party funding to international arbitration proceedings in 2017 has generally been well received by legal practitioners and end-users alike—and the decision to extend the permissibility of third-party funding will likely yield still more demand in the region for this financing option.
This latest expansion of permissibility means that law firms and businesses can use legal finance to offset costs relating to domestic arbitrations as well as international arbitrations seated in Singapore. This move will only strengthen Singapore’s position as a centre for commercial arbitration.
In addition, MinLaw is considering changes to the lawyer fee structures for these proceedings—namely, the option for lawyers to work on the basis of a conditional fee (or fee uplift upon a successful outcome). The move would level the playing field with lawyers outside Singapore who are already able to offer such agreements.
Having more legal fee structure options available is patently beneficial for both law firms and their clients. Conditional fees would go some way in enabling law firms to provide clients with greater access to counsel and the courts whilst disregarding any economic impediments that would otherwise prevent meritorious claims from being brought.
Burford is well placed to meet demands from Singapore
As the first legal finance provider reported to fund a Singapore-seated arbitration and with an office in Singapore, Burford is ideally positioned to meet the increasing demand for third-party funding in the region.
Should MinLaw decide to permit conditional fees or other alternative fee structures in these types of proceedings, law firms will need a partner to help manage the extraordinary risk necessarily entailed by taking on multiple clients who have meritorious but uncertain and expensive matters. Burford has a 10-year track record of funding alternative fee arrangements globally in jurisdictions where these arrangements are widely accepted.
Since 2017, Burford has received numerous funding inquiries from the region and we expect—with the broadening of the rules in Singapore—demand will only rise. As the largest and best capitalized global provider of legal finance, Burford is in the best position to provide legal risk management and financing solutions to clients.