Singapore recently passed a Legal Professional (Amendment) Bill that permits CFAs (conditional fee arrangements) in international arbitrations. This change, introduced by the Legal Professional (Amendment) Act 2022, is said to improve the options to share risk among the involved parties.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Singapore recently passed a Legal Professional (Amendment) Bill that permits CFAs (conditional fee arrangements) in international arbitrations. This change, introduced by the Legal Professional (Amendment) Act 2022, is said to improve the options to share risk among the involved parties.
Burford Capital explains that these reforms represent a natural progression of Litigation Finance in international arbitration cases, which was adopted into law in Singapore in 2017. The legislation is similar to what was passed in Hong Kong last year, which uses outcome-related fee structures for arbitrations. Singapore is poised to become a destination jurisdiction for certain types of cases—and this legislation promises to expand that. To wit, Singapore is currently on par with London as a preferred locale for arbitration.
Runaway legal costs have increased demand for flexibility in payment structures and risk tolerance. The new legislation promises to give Singapore a more competitive standing, as many surrounding jurisdictions already allow a greater array of risk-sharing options. This will also be a benefit to those pursuing arbitration—affording parties access to better legal representation and minimizing legal costs.
That begs the question: Who is best able to take on the risks associated with these cases? Litigation Finance professionals can provide funding as they take on the risk associated with the cases they choose to fund. Funders are adept at evaluating cases for funding, ensuring that the most meritorious cases have their day in court. Those funders who already maintain a presence in Singapore are perhaps best suited to take advantage of this new legislation.
