Hong Kong reviews laws for third party funding in arbitration
Hong Kong could introduce new laws relating to third party funding (TPF) for arbitrations, after appointing a sub-committee to review the existing rules on employing outside funders in private dispute proceedings. The city's Law Reform Commission (LRC) recently fielded a group of litigators and arbitrators, led by Hong Kong barrister Kim Rooney, to review the current position relating to TPF for arbitration and to make recommendations for reform if appropriate.
October 31, 2013 at 03:34 AM
2 minute read
Hong Kong could introduce new laws relating to third party funding (TPF) for arbitrations, after appointing a sub-committee to review the existing rules on employing outside funders in private dispute proceedings.
The city's Law Reform Commission (LRC) recently fielded a group of litigators and arbitrators, led by Hong Kong barrister Kim Rooney, to review the current position relating to TPF for arbitration and to make recommendations for reform if appropriate.
The committee has started work on a consultation, to be sent out to the legal industry, which could be completed as early as next year. After receiving feedback from the public, it will then be tasked with advising the LRC on possible changes to the law.
"This is a big topic for the Law Reform Commission to consider," said Rooney.
"It is crystal clear that champerty and maintenance have not been abolished, [prohibiting TPF in litigation] bar a few exceptions. The position for arbitration is not so clear."
Hong Kong has long been trying to boost its profile as a centre for dispute resolution in Asia, partly by introducing more attractive rules and regulations in relation to arbitration and mediation.
In June 2011 it introduced a new Arbitration Ordinance, and this year unveiled its new arbitration rules, due to come into effect next month.
The Hong Kong International Arbitration Centre (HKIAC) also opened its first overseas office in the Seoul International Dispute Resolution Centre (IDRC) in May, with a view to enhancing its relationships with users of arbitration services in Korea.
However, unlike other common law jurisdictions such as the UK and Australia, Hong Kong continues to regard maintenance and champerty as criminal offences under local law, and has thus refused to allow third party funding in court proceedings.
Lawyers in the city are split between those believe in third party funding for litigation and those who don't, whilst there is now also some debate as to whether TPF is already permitted for arbitrations.
Other lawyers appointed to the TPF for arbitration committee include Hong Kong-based arbitrator and Herbert Smith Freehills' China managing partner Justin D'Agostino, in addition to barristers Robert Pang, Teresa Cheng and Victor Dawes and Lipman Karas partner Jason Karas.
Related: Top-level Hong Kong group discusses move to bring in class actions
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