What is Arbitration Funding?

Arbitration funding involves a third-party financing some or all of the legal expenses of one or more arbitral disputes in exchange for a share of the proceeds recovered from the resolution of the dispute(s). These transactions are typically non-recourse, meaning that if there is no recovery made from the dispute, then there is no obligation to repay the funder its advances or to pay any return on its investment.

Arbitration provides an alternative to litigation pursued through jurisdictional courts, which offers flexibility and control to the parties involved in a dispute, but which is often costly due to the complex commercial nature of the dispute (particular where the dispute involves transnational parties and raises issues of conflicts of laws) and the sophisticated, specialist counsel at premier law firms engaged by the parties to assist in its resolution. While the cost of International arbitration most likely reflects the complex, commercial and often cross-border nature of the disputes being arbitrated, rather than any inefficiency of arbitration procedures or the parties involved, it can be burdensome on claimants. Increasingly third-party arbitration funding is sought to ease the pressure of these burdens.

Third-party arbitration funding allows cash-constrained claimants to pursue meritorious claims, who ordinarily might not have the resources to seek the redress they are entitled to. It can also be used to allow well-resourced claimants to hedge their legal costs risk and reduce the burden of legal costs on their balance sheet.

Woodsford is a founder member of both the International Legal Finance Association and the Association of Litigation Funders.

Woodsford Litigation Our people

Our People

Our team offers a unique blend of legal and financial expertise. We use our own in-house legal capability and deploy our own funds, rather than relying on external advice or capital.

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About woodsford

About Woodsford

We are experts in delivering tailored financial solutions to meet the specialist needs of law firms and their clients involved in litigation and arbitration across the globe.

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Downloads

Downloads

Keep ahead of the latest thinking in litigation and arbitration funding with our series of papers and comment pieces, as well as brochures, product sheets and case studies which can be downloaded as PDFs.

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