ICSID’s Secretary-General Reflects on Developments and Rule Changes for Third-Party Funding

International arbitration and dispute resolution remains one of the most complex and wide-ranging areas which litigation funders are involved in. The International Centre for Settlement of Investment Disputes (ICSID) sits at the heart of this activity, and its leadership is well-placed to observe the latest developments and trends, as demonstrated by a recent interview with ICSID’s secretary general.

On the latest episode of D.C. Bar Communities’ The Tea on International Arbitration podcast, Meg Kinnear, secretary-general of ICSID, was interviewed by Nicole Silver, investment manager at Validity Finance, and Gaela Gehring Flores, partner at Allen & Overy. Looking back on her tenure over the last 13 years, Kinnear points out that ICSID’s membership has grown from 143 to 158 states in that time, which has also been reflected in the volume of caseloads.

Reflecting on backlash against ICSID from political figures in the US, Kinnear stated that most of these perspectives are a result of misinformation or a simple lack of information, especially with common myths such as states always being on the losing end of this type of arbitration. However, in recent years Kinnear believes that there has been somewhat of a change in broader opinions, and that while the system is continually evolving and improving, state perspectives are becoming more favourable.

Discussing ICSID’s new rules, especially in regard to transparency and disclosure of third-party funding, Kinnear highlighted that having last been amended in 2006, these rules were overdue for a change. Litigation funding was a key area of consideration, with Kinnear making it clear that it was not ICSID’s role to condemn or endorse third-party funding. Kinnear also reiterated that the main focus for this rule was to avoid conflicts of interest, not to enhance disclosure or discovery.