1 GENERAL SIGNIFICANCE FOR THE LEGAL PROFESSION

Third-party funding, also referred to as "alternative litigation finance", has been generally available and legally permitted in various countries for some time,1 but it has only recently taken hold in domestic litigation in the United States2 and in international arbitration, especially investor-state arbitration and commercial arbitration.3

For example, in England, the Civil Justice Council began considering third-party funding as a means to improve access to justice in 2001.4 Following discussion of the issue in several papers, at conferences and with stakeholders, the Civil Justice Council and the Association of Litigation Funders of England and Wales5 issued a voluntary Code of Conduct for Litigation Funders in November 2011, setting out certain standards of practice and behaviour for funders.6 In parallel, following a wide-ranging review of civil litigation costs and their implications for access to justice, Lord Justice Jackson's final report included discussion of third-party funding and recommended, inter alia, that certain aspects of third-party funding be regulated.7 The so-called Jackson reform proposals prompted the adoption of new legislation, the Legal Aid, Sentencing and Punishment of Offenders Act 2012, which, however, does not specifically address third-party funding.8

Noting these developments in England, the American Bar Association (ABA) began in 2009 to identify the ethical issues that may arise for lawyers in the United States when contemplating or dealing with third-party funding. The ABA referred the issue to its Ethics 20/20 Commission, which had just been created to assess the impact of globalization and technology on the practice of law and to propose methods of addressing that impact for members of the Bar in the United States. The Commission held hearings on third-party funding to assess how it was being done in the United States through funding entities, insurance companies, etc. After hearing the views of the funders, the parties and counsel, the regulators (Bar Counsel and Bar Presidents) of the Commission decided to consider the issue further. The Commission referred the evidence to its Task Force on third-party funding to study and analyze the issue in depth. The Task Force did not see the need to recommend that the Commission propose any amendments to the existing Model Code of Professional Responsibility to deal with any of the issues posed by third-party funding. Rather, in December 2011, the Ethics 20/20 Commission produced a White Paper on third-party funding-related ethical issues, which was filed as an Informational Report with the ABA House of Delegates in February 2012.9 That White Paper discusses the various ethical and legal issues that arise when a lawyer is participating in a third-party funded case.

The English Code of Conduct and the ABA White Paper both address third-party funding primarily from the point of view of litigation in state courts. Nonetheless, given the careful consideration given in both to balancing the various competing interests involved in third-party funding, they may also serve as useful works of reference in the area of investor-state arbitration. The Commission recognized the importance of third-party funding in enhancing access to justice.

2 SIGNIFICANCE IN INVESTOR-STATE ARBITRATION

In international arbitration, the threshold issue of whether third-party funding is even permissible is complicated by the need first to determine which law applies. As pointed out by a commentator, in international arbitration, "[p]otentially applicable bodies of law include the law at the seat of arbitration, the law governing the substance of the dispute, the law governing the arbitral procedure and the law of the jurisdiction(s) in which the ultimate award may be enforced".10 Adding third-party funding to the mix may result in the applicability of yet additional bodies of law, such as the law applicable to the arbitration agreement, the law applicable to the funding agreement, the law applicable to the legal services agreement between the party and its arbitration counsel and the law applicable to the professional conduct of arbitration counsel.11

Notwithstanding these potential issues, and despite the usual confidentiality surrounding funding arrangements, third-party funding appears to have been used by claimants in a number of investor-state arbitrations. Publicly known examples are: S&T Oil v. Romania, where the claimant was funded by Juridica;12Fuchs and Kardassopoulos v. Georgia, where the claimants were funded by Allianz Litigation Funding;13Oxus Gold v. Uzbekistan, where the claimant is being funded by Calunius Capital;14Teinver v. Argentina, where the claimants were funded by Burford; 15 and Rusoro v. Venezuela, where the claimant is funded by Calunius Capital. 16 Other cases have involved funding of claimants by related or otherwise interested parties: ATA v. Jordan; 17RSM v. Grenada; 18 and Fitzpatrick v. Equatorial Guinea. 19 Some regard the claimants in Abaclat v. Argentina. as third-party funded, but there is a distinction in that the banks providing the funding are not in return entitled to a share in any recovery; they are simply allowing the individual bondholders access to ICSID arbitration, which otherwise would be inaccessible to them as a remedy. 20

Far fewer examples are known of states using third-party funding in investor-state arbitration. One might thus wonder whether special considerations apply to a state's use of third-party funding. We address these immediately below.

Further below, we discuss other issues, including the implications of third-party funding for jurisdiction or standing, confidentiality issues, counsel's independence and objectivity, and costs decisions.

a. Third-party funding of the state's legal expenses

In investor-state arbitration, where the sovereign party usually is the respondent, 21 a third-party funding arrangement with the state might include coverage for the costs of the legal defence or a portion thereof. 22 It might also, similar to an insurance policy, protect the respondent against a greater-than-expected amount of damages, if any, that the respondent might be ordered to pay in the event the claimant prevails. 23 Conversely, in the event the state prevails, i.e., successfully defends against the claimant's claims (with "success" being defined in the funding agreement), the funder's reward likely would consist of a certain sum of money. 24

In such a scenario, a government might find it difficult in hindsight to justify to its constituents why it committed to pay a significant amount to a private (foreign) financier although the state ultimately prevailed in the arbitration, especially if the claims raised against the state are perceived as frivolous. 25 A government also may not wish to have to explain politically how it is in sovereign control of its arbitration strategy if the state lacks the funds to pay for its legal expenses and in this regard relies entirely on private third-party funding. Notwithstanding these potential concerns, the third-party funding industry appears to discern a "clear demand" for respondent funding in investor-state arbitration. 26

Within the arbitration itself, a government might be concerned that use of third-party funding could expose it to claims, even if unmeritorious, that the state's action that is at issue in the arbitration was improperly motivated or unduly influenced by an interested third party. Indeed, such claims reportedly were raised (but ultimately dismissed) in the context of the ICSID arbitration in RSM Production Corporation v. Grenada and in related law suits filed by the arbitration claimant in United States courts against, among others, the state's arbitration counsel. 27 In that case, however, the third-party funder apparently was not a professional litigation funder but an entity that allegedly was interested in acquiring the very oil and gas exploration and development licences that were at issue in the arbitration. 28

Another publicly known investor-state arbitration in which the state's legal defence appears to be funded by a third party is the pending ICSID case brought by Philip Morris against Uruguay. 29 In that case, funding is apparently provided by a non-profit advocacy group based in the United States. 30 In that regard, there have been suggestions that the funding may have been a factor in Uruguay's decision to defend the case rather than scale back its disputed tobacco packaging laws.31

b. Implications for jurisdiction or standing

Typically, a litigation funding arrangement will provide that the third-party funder is to receive a portion of the proceeds of the eventual award (assuming a monetary award is rendered in favour of the funded party). Such an arrangement may take the form of an assignment granting the funder a beneficial interest in the claim. The question arises whether this affects the arbitral tribunal's jurisdiction and/or the funded party's standing. Given the potential implications of such an assignment, that approach should be avoided in investor-state arbitration where nationality is jurisdictional.

Thus, if the funded party and the funder do not share the same nationality, in particular if a claimant's funder has the nationality of the host state, it is essential to assess whether the claim would continue to meet the nationality requirement under a bilateral investment treaty or the ICSID Convention to the extent of the funder's beneficial interest in the claim. Indeed, this was an issue in an ICSID arbitration based on the Argentina-Spain Bilateral Investment Treaty (BIT), Teinver v. Argentina, in which Argentina raised a jurisdictional objection to this effect putting forth the following arguments:

" 245. Regarding Claimants' Funding Agreement with Burford, Respondent asserts that it is Burford, and not Claimants, that is the real party interested in this arbitration. According to Respondent, Burford has 'not only invoked that it holds a purported "common legal interest" with the Claimants in this proceeding, but it is also the only party that would seem to be potentially benefited in the case of a hypothetical award against Argentina in the instant case.'

246. According to Respondent, Burford does not meet the basic jurisdictional requirements under the ICSID Convention. Burford is not an investor in Argentina, nor is it a company organized in Spain that could invoke the Treaty relied upon by Claimants to institute this arbitration proceeding. Thus, allowing Burford to benefit from a dispute settlement mechanism authorized under the Treaty is contrary to the object and purpose of the latter, and would impermissibly bypass the limits of Argentina's and Spain's consent to arbitral jurisdiction."32

The tribunal observed that in international adjudication generally, and in ICSID arbitration in particular, the existence or not of jurisdiction is to be determined by reference to the date on which the proceeding is instituted, and that later events cannot defeat jurisdiction.33 (But see Loewen v. United States, which is discussed below.)

The tribunal disagreed with Argentina's argument that, by concluding the funding agreement, the claimants had transferred their rights or interests in the case to the third-party funder and thus no longer had standing. In this regard, the tribunal referred to the following passage of the decision on jurisdiction in CSOB v. Slovak Republic:

" it is generally recognized that the determination whether a party has standing in an international judicial forum for purposes of jurisdiction to institute proceedings is made by reference to the date on which such proceedings are deemed to have been instituted. Since the Claimant instituted these proceedings prior to the time when the two assignments were concluded, it follows that the Tribunal has jurisdiction to hear this case regardless of the legal effect, if any, the assignments might have had on Claimant's standing had they preceded the filing of the case."34

Finding that the funding agreement was concluded after the parties had perfected their consent to ICSID arbitration, after the claimants had filed their request for arbitration and after the case had been registered, the tribunal rejected Argentina's jurisdictional objection.35

Although the Teinver tribunal did not address the scenario of a funding agreement being concluded prior to the date on which consent to ICSID arbitration was perfected, and the assignments at issue in CSOB also occurred after that date, the CSOB tribunal did venture out a little further, observing by way of an obiter dictum:

" it is not really necessary for the Tribunal to address Respondent's contention that the assignments here in question transformed the Czech Republic into the real party in interest because it became, for all practical purposes, the beneficial owner of the disputed claims and because Claimant, as a result, no longer has a real economic interest in the outcome of these proceedings. But even if the Tribunal, for purposes of the argument, were to accept this contention, it would not follow that this case would have to be dismissed for lack of jurisdiction. This conclusion is compelled by the consideration that absence of beneficial ownership by a claimant in a claim or the transfer of the economic risk in the outcome of a dispute should not and has not been deemed to affect the standing of a claimant in an ICSID proceeding, regardless whether or not the beneficial owner is a State Party or a private party. It must be emphasized, moreover, that the second assignment does not deprive claimant of an interest in the outcome of the case because the assignment becomes effective only after these proceedings terminate and because the assignor remains entitled to a share (either 25 or 10%) of the amount received by the assignee."36

Thus, arguably, so long as the claimant retains some share of the proceeds and, accordingly, an interest in the outcome of the case, the existence of a third-party funding arrangement would not impair the claimant's standing to pursue the claim.

This may be different, however, where the funder's nationality is different from the claimant's nationality. This issue did not arise in CSOB because the claimant, a Czech bank, had the nationality of the assignee, the Czech Republic.

The issue did arise in Loewen v. United States, a NAFTA Chapter 11 arbitration conducted under the ICSID Additional Facility Arbitration Rules. In that case, the Canadian corporate claimant underwent reorganization proceedings during the course of the arbitration. Under the reorganization plan approved by the bankruptcy courts of Canada and the United States, the claimant ceased to exist, its business operations were taken over by a United States corporation and only its NAFTA claim was assigned to a specially-created Canadian corporation, Nafcanco.37 The Tribunal found, however, that Nafcanco's only business was to pursue the arbitration claim and that "[a]ll of the benefits of any award would clearly inure to the American corporation".38 Finding further that NAFTA Chapter 11 contained an express nationality requirement only with respect to the date of submission of the claim, the tribunal controversially applied the continuous nationality rule, requiring that nationality must continue until the date on which the claim is resolved.39 Finding on this basis that Nafcanco did not qualify as a continuing national and thus was not capable of pursing the NAFTA claim, the tribunal held that it lacked jurisdiction to determine the NAFTA claim.40

Whatever one might think of the application of the continuous nationality rule in Loewen, it is important to note that Loewen, in this respect like Teinver and CSOB, did not involve a transfer of a beneficial interest in the outcome of the arbitration that occurred prior to the perfection of the parties' consent or the institution of the arbitration. This issue apparently has not yet been addressed by an investor-state tribunal. Moreover, given the absence of stare decisis in investor-state arbitration, one investor-state tribunal's decision would not be dispositive and would not bind another.

c. Invitation to class arbitration?

There does not seem be any controversy that, by shifting the litigation cost risk to a third party, third-party funding will enable parties to resort to investor-state arbitration where a lack of funding might otherwise prevent them from doing so.41 Doubts have been expressed about the desirability of third-party funding in investor-state arbitration due to a concern, inter alia, that it will open the floodgates to frivolous claims against states, which, even if ultimately rejected, are not only costly to defend but may also have lasting negative effects on a state's reputation as a host of foreign investment.42 On the other hand, the involvement of third-party funders has been said to prevent frivolous claims from going forward, because funders, whose recovery depends on the claim's success, will typically subject claims to their own relatively thorough screening before signing on, thus in fact acting as "gatekeepers".43 Moreover, the presence of third-party funding may induce early settlement, thus reducing the cost of litigation.44 Most fundamentally, third-party funders are seen by others as permitting claimants to pursue legitimate claims that they could otherwise not afford to pursue, thus facilitating access to justice.45

Studies of the Australian and European legal markets have found that third-party funding has supported the growth of group actions.46Abaclat v. Argentina, to date the first investor-state arbitration of a mass claim, is funded, as recognized by the tribunal in its decision on jurisdiction, by the Italian banks involved in Task Force Argentina.47

The Abaclat claimants' arbitration costs to date have been fully funded by a third party, Task Force Argentina (TFA).48 However, unlike a professional third-party litigation funder, TFA and its member banks are not entitled in return to partake in any recovery awarded to the Abaclat claimants. The funders are simply facilitating the small individual retail bondholders' access to ICSID arbitration, a remedy that would otherwise be denied to them.

d. Implications for costs decisions

Generally, the arbitration rules governing investor-state arbitral proceedings provide broad discretion to the arbitral tribunal on how to allocate costs.49 Against this background, and lacking any specific guidance in the arbitration rules, the question arises whether and, if so, to what extent the fact that a party is funded by a third party is relevant to the tribunal's costs decision.

Thus far, the general trend appears to be that investment tribunals will not give any relevance to the existence, or not, of third-party funding, as most recently expressed by the ad hoc committee in ATA v. Jordan:

" the Committee will only observe that, in any event, it 'knows of no principle why any … third party financing arrangement should be taken into consideration in determining the amount of recovery by [parties] of their costs' incurred in arbitration proceedings."50

3 INVOLVING THE FUNDER

a. Divergent interests

When third-party funders are involved, there is the potential that the respective interests of the party, its lawyers and the funder diverge during the course of the proceedings. A "Bermuda Triangle" of divergent interests has been said to exist when the relief sought by the claimant is no longer in harmony with the interests of the claimant's lawyers and the case's funders.51 For example, the claimant might be interested in settling the case for non-economic reasons, while the third-party funder may be primarily interested in a monetary award. Similarly, injunctive relief or any other relief that is not tied to a monetary award might be in the best interest of the claimant but might not be in the best interest of the third-party funder.

News reports concerning the ICSID arbitrations between two energy traders, Ron Fuchs and Ioannis Kardassopoulos, financed by German litigation funder Allianz Litigation Funding, and the Republic of Georgia illustrate how such a divergence of interests might develop.52 In March 2010, the ICSID tribunal awarded Mr Fuchs and Mr Kardassopoulos compensation for breaches of the Israel-Georgia BIT and the Energy Charter Treaty, plus interest and costs, in excess of USD 100 million.53 Rather than pay the award, Georgia proceeded to seek its annulment, as well as a stay of its enforcement pending the annulment proceeding.54 In the meantime, settlement discussions ensued, reportedly resulting in a verbal agreement between a Georgian government official and Mr Fuchs whereby Georgia would withdraw its annulment request in exchange for having to pay only approximately two-thirds of the amount owed under the ICSID award. As also reported, the settlement involved an oral promise of a kickback payment, which was recorded on videotape, apparently in the course of a sting operation.55 During a subsequent visit to Georgia in October 2010, Mr Fuchs and a business associate were arrested on bribery charges.56 Georgia then initiated a proceeding for revision of the ICSID award, based on new evidence.57 Eventually, in December 2011, Georgia's authorities reportedly pardoned and released Mr Fuchs and his associate, withdrew its requests for revision and annulment of the ICSID award and paid approximately one-third of the amount awarded by the ICSID tribunal.58 Although the details of the third-party funding arrangement are not publicly known, it is probably not speculative to assume that the funder's recovery ultimately was significantly lower than anticipated at the time the ICSID award was issued.

b. The funder's influence

Funding agreements may specify restrictions, including on a client's right to terminate a lawyer or to retain counsel, in order to allow the funder to protect its investments and maximize the expected value of claims.59 For example, in the Florida state court litigation Abu-Ghazaleh v. Chaul, the plaintiffs' third-party funders significantly controlled the litigation.60 They had reserved the right to approve the filing of the lawsuit and had authority over the selection of the plaintiff's attorneys as well as veto power over any settlements.61 Additionally, the funders determined how the lawsuit would be pursued and had even recruited fact and expert witnesses.62 Such a practice raises the general question of whether certain client functions are non-delegable.63 Courts in the United States have tended to agree that, as between a client and counsel, the client's right to discharge counsel is virtually absolute, and accordingly have voided any provisions in retainer agreements to the contrary.64 In the lawyer-client relationship, the client retains the authority to decide whether or not to settle the lawsuit.65 However, because the funding agreement between the client and the third-party funder is an arm's-length transaction and does not involve a fiduciary relationship - in contrast to the lawyer-client relationship - the client may legitimately bestow rights on the third-party funder, including the right to discharge counsel and make strategic decisions about the course of the litigation.66

Other terms of the third-party funding agreement may also influence the client's decision on whether or not to settle a claim and for what amount. For example, a plaintiff may not accept a reasonable settlement because the funds received may not satisfy the plaintiff's contractual obligations to the third-party funder. Settlement disincentives are thus created when the party contracting with the third-party funder decides to settle for nothing less than what would be owed to the attorney and the third-party funder combined.67 The case of Weaver, Bennett & Bland, P.A. v. Speedy Bucks, Inc. represents an extreme situation where the plaintiff, backed by a third-party funder, continued to refuse settlement offers because her contract with the third-party funder was such that a court loss with no award of monetary damages was better than accepting less than a million-dollar settlement.68 The client and third-party funder then began dealings to settle among themselves, without the lawyer's knowledge.69 Thus, third-party funder influence may be strong enough to circumvent the objectives of counsel and frustrate speedy resolution of the dispute.

The funder's right to terminate the funding agreement may also give the funder some level of control over the proceedings. If the funder has the right to terminate the agreement "at will", the client may be unwilling to take action in the litigation that is adverse to the funder's wishes. Such a scenario raises the question whether or not the funder has a responsibility to the opposing party for costs that it caused that party to sustain in defending the lawsuit. Note that this consideration differs from a funder's right to withdraw "for cause". For example, as has been widely publicized, in the context of the so-called Lago Agrio litigation involving Chevron in Ecuadorian courts, Burford Group (Burford) terminated its funding agreement with the plaintiffs upon learning from documents obtained by Chevron in discovery that Burford's client had engaged in deceitful conduct to secure its funding.70 Burford unsurprisingly took the view that such conduct was in breach of its funding agreement and warranted termination "for cause".71 As set forth in Burford's termination letter, its client had purposely engaged in a multi-month scheme to deceive and defraud Burford into giving the client much-needed funds.72 Burford claimed that it would have walked away from the litigation and never funded the client had it known the true state of affairs.73

c. The lawyer's ethical considerations

There are a variety of ethical issues lawyers may confront when a client accepts financing from third-party funders. These ethical concerns encompass confidentiality, scope of disclosure and the independence and objectivity of counsel. Confidentiality issues arise when the lawyer is required to disclose information to the third-party funder.74 A lawyer's duty of confidentiality may be compromised by a third-party funding agreement that calls for the lawyer to disclose certain information.75 If a disclosure is made, there is a risk that the disclosed material may be discovered.

Second, third-party funders may or may not be included in the group of persons to which the common interest privilege applies.76 Additionally, the lawyer's independence and objectivity may be compromised by third-party funding agreements that call for the client - or lawyer - to obtain the third-party funder's consent before settling or taking certain key actions during litigation.77

Lastly, the lawyer may be encumbered in providing impartial, unbiased advice to the client if that lawyer has a previous or continuing relationship with the third-party funder.78 Such a relationship may infringe on the lawyer's objectivity and create a conflict of interest.79 The lawyer should also ensure that he or she is providing advice that is best for the client, not the third-party funder who is in control of the lawyer's compensation.80 The lawyer should take care not to let purse strings influence his or her judgment and loyalty to the client.

Other ethical issues for the lawyer stem from the Model Rules' requirements concerning referrals, compensation and fee sharing. There are volumes of state ethics opinions that have addressed whether or not a lawyer may refer a client to providers of third-party funding or provide advice to a client on the availability of third-party funding.81 While it appears to be permissible for the lawyer to do so, the lawyer should ensure that she or he has the competence to do so when advising the client on the terms of a third-party financing contract.82 However, the lawyer should take care not to charge excessive fees for becoming knowledgeable on the subject, which could be deemed unreasonable.83 For example, in In re Fordham, the court imposed sanctions on a lawyer for charging an excessive fee for learning how to take on the client's case.84 The court reasoned that the inexperienced lawyer is not entitled to charge three or four times as much as an experienced lawyer for the same service and that a client should not be expected to pay for the education of a lawyer when he spends excessive amounts of time on tasks that, with reasonable experience, become routine matters.85 Second, when accepting compensation from third parties, the lawyer should ensure that he or she receives informed consent from the client and does not allow the third-party funder to influence the lawyer's independent professional judgment or ability to render candid advice.86 A final ethical consideration for a lawyer is that he or she may not agree to share his or her fee with a non-lawyer, which would include third-party funders.87 However, an ordinary secured transaction should not violate the prohibition on fee sharing, because it is not inappropriate for a lender to take a security interest in an attorney's accounts receivable.88 Accordingly, if a lawyer directly contracts with a third-party funder to finance litigation, that lawyer may repay that loan by directly assigning his or her attorney's fees to the third-party funder.89

d. Issues of confidentiality

Once a document is disclosed to a third party or the public, it generally loses any confidentiality privileges. In order to satisfy political or legal requirements of accountability to the public, a government may wish to be transparent about third-party funding. Lawyers and funders working with governments need to recognize this potential need for transparency from the outset in drafting the documents and ensure, subject also to applicable legal and ethical obligations, that disclosure of the funding arrangement does not reveal any confidential elements of the party's litigation strategy.

Furthermore, if a dispute erupts between the funder and the party being funded, the funder may use case documents that it has obtained from the funded litigation against the party it had previously funded. The publicly known facts of the falling-out between S&T Oil and its third-party funder, Juridica, in connection with S&T Oil's ICSID arbitration against Romania are illustrative in this regard.90 In the course of the ICSID arbitration, S&T Oil's counsel withdrew from representation on the ground that S&T Oil had failed to disclose a "critical piece of evidence".91 The ICSID arbitration subsequently was discontinued for S&T Oil's failure, over almost one year, to make a required advance payment to ICSID.92 Juridica thereupon terminated the funding arrangement citing similar grounds and sought to recover its investment through an LCIA arbitration against S&T Oil.93 S&T Oil reacted by filing suit against Juridica in US federal court in Houston, Texas, under the US Racketeer Influenced and Corrupt Organizations (RICO) Act, alleging that its former counsel had "violat[ed] its ethical and legal obligations" by allowing Juridica, while it was still funding the arbitration, access to case files that Juridica now was using against S&T Oil in the LCIA arbitration.94

e. Discovery

Unique discovery issues may arise in a case financed by a third-party funder. It is, for example, not settled whether documents produced throughout the proceeding that are provided to a third-party funder may be deemed privileged or are fully discoverable. This was the dilemma the US District Court in Delaware dealt with in Leader Techs., Inc. v. Facebook, Inc.95 Plaintiff Leader Techs. claimed the common interest privilege to protect attorney-client or work-product privileged information for documents it had conveyed to its potential third-party funders.96 In order for a common interest privilege to exist, the party claiming the privilege must demonstrate that its disclosures to the third-party funders would not have been made but for the sake of securing, advancing or supplying legal representation.97 Additionally, for a communication to be protected, the interests must be identical and of a legal nature.98 The court analyzed the state of the law in the Third Circuit (which spans the states of Delaware, Pennsylvania and New Jersey) as well as Pennsylvania and New Jersey ethical guidelines.99 The court found that the common interest privilege did not exist in that case, because the third-party funders had expressed interest in financing the litigation but had not fully consummated the deal.100 The court clarified that plaintiff Leader Techs. had the burden of proof, that the law regarding common interest privilege was still unsettled and that the case presented a close question.101

Recently, a federal district court in Pennsylvania allowed the common interest privilege to extend to a third-party funder where a funding agreement had been executed. In Devon IT, Inc. v. IBM Corp., the court ruled that documents which plaintiff Devon shared with its third-party funder under the terms of a confidentiality, common interest and non-disclosure agreement were protected by the common interest privilege.102 As such, defendant IBM's subpoenas calling for all communications shared between Devon and its funder were held invalid.103 In holding that the documents were protected by the common interest privilege, the court considered that the documents were prepared by counsel for Devon in anticipation of and during litigation (and thus were protected by the work-product doctrine) and that the documents were turned over under terms of a confidentiality, common interest and non-disclosure agreement.104 Additionally, no waiver of the attorney-client or work product privilege existed.105

Although these cases involved US federal litigation rather than international arbitration, similar considerations may apply in international arbitration, depending on the applicable law governing the arbitral procedure.

f. Interim measures against third-party funders

The third-party funder may find itself liable to provide security for costs. This risk appears to be greater in proceedings in which the so-called English Rule (i.e., the costs follow the event, or: loser pays) applies. Under English law, a party that obtains a judgment against a party financed by a third-party funder may be able to collect from the third-party funder. In Arkin v. Borchard Lines, Ltd. No. 2, the English Court of Appeal found the third-party funder liable for all costs up to the amount of its contribution to the litigation.106 The underlying rationale was that justice would be better served by allowing a right to recover from the professional funder whose intervention had permitted the continuation of a claim that had proved to be without merit.107 Thus, a third-party funder potentially faces further risk of loss from its involvement in a case in which the party it supports ultimately does not prevail. Although requests for interim relief seeking security for costs are rarely successful,108 the same rationale may also apply at the interim stage. Additionally, it may provide support to those who propose a policy that parties should disclose to arbitral tribunals whether or not they have obtained third-party financing.

g. Recovery of the funder's fee

Besides the anticipated risk of an unfavourable arbitral award, a third-party funder bears the additional risk of total loss of its investment when, due to unforeseen events, the proceeding ends without an award or settlement. The case described above of S&T Oil and Juridica illuminates this point.

Another recovery issue that the third-party funder may face, should its client prevail, is the client's inability or unwillingness to enforce the award against the losing party. To address this issue, the third-party funder and client may provide in their funding agreement for an assignment of the client's rights to the funder. As an example, Burford, one of the largest providers of investment capital for litigation, structures its litigating financing contracts in such a way that the client assigns all litigious rights to Burford through a trust.109 The trust holds:

" all of the litigious rights as well as any and all interest in the Claim, the Award, any proceedings of the enforcement [of] the Award, and any proceeds of any of the foregoing held by the Claimants as of the date of the assignment… (collectively, the 'Litigation Rights')."110

Burford's contracts also provide that the assignment is irrevocable.111 By giving itself irrevocable contract rights, Burford protects itself from the outset from being precluded from participating in enforcement proceedings.

4 NEED FOR REGULATION?

a. Hard or soft regulation?

To regulate third-party funding for litigation, the industry may end up self-regulating the process, the Bar may create new rules or individual jurisdictions may create statutory authority. In England and Wales, the Association of Litigation Funders of England and Wales was established as an industry association to promote best practices in funding litigation, among other goals.112 Accordingly, the Code of Conduct of the Association of Litigation Funders of England and Wales sets standards that all of its members must follow.1113 The standards dictate, for example, that funders should maintain adequate financial resources, refrain from taking control of the litigation or settlement negotiations and not take any steps that would cause lawyers to act in breach of their professional duties.114 In the United States, as mentioned earlier, the ABA Commission on Ethics 20/20 found that existing professional ethics rules provided an adequate framework to address the ethical issues arising with respect to third-party litigation funding. Accordingly, the Commission sought to raise awareness of those issues by preparing and publishing a White Paper. Further experience with third-party funding, including in connection with international arbitration, may or may not raise a need to revisit the issue.

b. Harmonization of existing, diverging rules?

Some common law jurisdictions prohibit champerty115 or maintenance.116 The prohibitions against champerty or maintenance are rooted in English common law and date back to medieval England.117 Because of the potential for corruption - the wealthy taking advantage of those who cannot afford litigation, among other concerns - champerty and maintenance were prohibited.118 Indeed, champerty was considered a perverse practice and a "means by which powerful men aggrandized their estates".119 In modern times, however, this view has changed. The fears that champerty and maintenance lead to speculation in lawsuits, the bringing of frivolous lawsuits or situations of financial overreaching by a party of superior bargaining position are assuaged by the fact that professional rules and rules of civil procedure prohibit lawyers from bringing frivolous suits, while the doctrines of unconscionability, duress and good faith protect against unjust contracts.120 Additionally, it is useful for a third party to provide funding, and consequently access to justice, to one who otherwise would not be able to afford litigation.121 Accordingly, the modern trend is correctly moving away from prohibiting third parties from financially backing lawsuits.122

Given the historic prohibitions against champerty and maintenance, and the present ABA Model Rules' prohibition against a lawyer obtaining a proprietary interest in the litigation and financing litigation, one might wonder why lawyers' contingency fee arrangements are deemed acceptable in the United States. Indeed, prior to the late 1800s, the United States considered contingency fee arrangements as champerty and maintenance, which were illegal at the time.123 However, by the 1880s, contingency fee arrangements were viewed as a legitimate means for lawyers to collect fees from clients.124 Motivations for such acceptance ranged from the public policy initiative for poor litigants to have access to justice to allowing third-party financing of suits:

" The acceptance of contingent fees in the United States has been explained by a combination of factors: first, the desire to provide access to the courts to persons who are unable to pay an advance or fixed fee and for whom in fact the unrealized damage claim constitutes the only tangible asset; and second, the relation and eventual abandonment of rules against champerty, maintenance, and barratry that had traditionally been interpreted to restrict the practice. American practice, in short, seems to have accepted contingent fees as the preferable alternative to legal aid."125

This explains why the ABA Model Rules explicitly allow contingency fee financing even though in substance contingency fee financing resembles the prohibited transactions of obtaining a proprietary interest in the litigation and financing litigation.126 Accordingly, contingency fees are generally viewed favourably in the United States. However, outside of the United States, numerous foreign jurisdictions prohibit the practice, generally viewing the lawyer's contingency fee arrangement as champertous, a means to stir up litigation and even "intrinsically evil".127

c. Is a special regime for international arbitration the solution ?

International arbitration brings together lawyers from different jurisdictions with different, sometimes conflicting ethical rules. Although there has been a general trend over the past several decades of a convergence of rules relating to arbitral procedure, with valuable support from the International Bar Association, lawyers generally continue to be bound by their respective "home" rules when it comes to their professional obligations.128 In the same way that this has led to discussion of the pros and cons of establishing a special ethics regime for lawyers acting in international arbitration, one might consider establishing a special regime for third-party funding in international arbitration.129 One should also consider, however, the risk of over-regulation, which may result in overlap and the need for further rules to address conflicts. Further consideration may be warranted in light of practical experience gained under currently existing rules.

* The authors wish to thank Jonathan Black and Trisha Grant for their valuable assistance.

ENDNOTES

1
See, e.g., Arkin v. Borchard Lines Ltd No. 2, [2005] EWCA Civ. 655 (holding that litigation funding was permissible where the plaintiff was impecunious and that the funder's liability to the opposing party for costs was limited to the extent of the funder's funding).

2
See, e.g., Schaner , Lawrence and Appleman,Thomas, 'Third-party litigation funding in the United States', Revista de Arbitragem e Mediação 32 (2012), p. 175; Seidel, Selvyn, 'Investing in Commercial Claims; New York Perspectives', N.Y. Dispute Resolution Lawyer 4(1) (2011), p. 20.

3
See, e.g., Kantor, Mark, 'Third-Party Funding in International Arbitration: An Essay About New Developments', ICSID Review - Foreign Investment Law Journal 24 (2009), p. 65.

4
See Civil Justice Council, 'Improved Access to Justice - Funding Options and Proportionate Costs, Report & Recommendations' (August 2005), at p. 5, available at: http://www.judiciary.gov.uk/JCO%2fDocuments%2fCJC%2f Publications%2fCJC+papers%2fCJC+Improved+access+to+Justice+-Funding+ options+and+proportionate+costs.pdf. The Civil Justice Council is an independent public advisory body, funded by the Ministry of Justice of England and Wales. It has responsibility under the Civil Procedure Act 1997 to oversee and coordinate the modernization of the civil justice system in England and Wales.

5
The Articles of Association, Rules of the Association and Memorandum o f Association of the Association of Litigation Funders of England and Wales are available at: http://www.judiciary.gov.uk/ about-the-judiciary/advisory-bodies/cjc/third-party-funding.

6
The Association of Litigation Funders of England and Wales, Code of Conduct for Litigation Funders (November 2011), available at: http://www.judiciary. gov.uk/JCO%2fDocuments%2fCJC%2fPublications%2fCJC+papers%2f Code+of+Conduct+for+Litigation+Funders+(November+2011).pdf. 7 Jackson, Lord Justice, Review of Civil Litigation Costs: Final Report (December 2009), p. 124, available at: http://www.judiciary.gov.uk/NR/rdonlyres/ 8EB9F3F3-9C4A-4139-8A93-56F09672EB6A/0/jacksonfinalreport140110.pdf

8
Legal Aid, Sentencing and Punishment of Offenders Act 2012, available at: http://www.legislation.gov.uk/ukpga/2012/10/contents/enacted.

9
American Bar Association Commission on Ethics 20/20, Informational Report to the House of Delegates (February 2012), available at: http://www.americanbar.org/content/dam/aba/ administrative/ethics_2020/ 20111212_ethics_20_20_alf_white_paper_final_hod_ informational_report.pdf.

10
See Kantor, supra note 3, at p. 76.

11
van Boom, Willem, 'Third-Party Financing in International Investment Arbitration', Erasmus School of Law, Rotterdam, the Netherlands, Working Paper Series K12, K20, K41 (2011), p. 42, available at: http://dx.doi.org/10.2139/ssrn.2027114.

12
Raymond, Nate, 'New Suit Against Juridica Exposes Cracks in Litigation Funding Model', The American Lawyer Daily, 15 March 2011, available at: http://amlawdaily.typepad.com/ amlawdaily/2011/03/litdailyjuridica.html.

13
Peterson, Luke Eric, 'Republic of Georgia Agrees to Pay 1/3rd of ICSID Award; Litigation Funder Eyes Recovery After Bumpy Ride', Investment Arbitration Reporter., 31 December 2011, available at: http://www.iareporter.com/articles/20111231_6.

14
Peterson, Luke Eric, 'Miner Secures Funding for Expropriation Claim Against Government (Uzbekistan); At Least Three Types of Funding Seen in Cases to Date', Investment Arbitration Reporter, 4 March 2012, available at: http://www.iareporter.com/articles/20120304.

15
Teinver S.A., Transportes de Cercanias S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic, ICSID case no. ARB/09/1, Decision on Jurisdiction, 21 December 2012, paras. 245-246.

16
Perry, Sebastian, 'Funder on board for new Venezuela claim', Global Arbitration Review News, 20 June 2012, available at: http://www.globalarbitrationreview.com/news/article/30624/funder-board-new-venezuela-claim.

17
ATA Construction, Industrial and Trading Company v. Hashemite Kingdom of Jordan, ICSID case no. ARB/08/2, Order Taking Note of the Discontinuance of the Proceeding, 11 July 2011, para. 34.

18
RSM Production Corporation v. Grenada, ICSID case no. ARB/05/14, Order of the Committee Discontinuing the Proceeding and Decision on Costs, 28 April 2011, para. 68.

19
Peterson, Luke Eric, 'Analysis: Equatorial Guinea Saga Sees Corruption Allegations, "Sham" Bankruptcy, Efforts to Block Arbitration (Including due to Third-Party Litigation Funding)', International Arbitration Reporter, 16 February 2012, available at: http://www.iareporter.com/articles/20120216_2.

20
Abaclat et al. v. Argentine Republic, ICSID case no. ARB/07/5, Decision on Jurisdiction and Admissibility, 4 August 2011, paras. 88, 458, 462 and 541. For the sake of full disclosure, the authors and their law firm, White & Case LLP, represent the claimants in Abaclat.

21
For example, of the 410 ICSID and ICSID Additional Facility arbitrations registered until 31 December 2012, a state or provincial government acted as claimant in only two cases, Gabon v. Société Serete S.A. (ICSID case no. ARB/76/1) and Government of the Province of East Kalimantan v. PT Kaltim Prima Coal and Others (ICSID case no. ARB/07/3).

22
See Seidel, Selvyn and Sherman, Sandra, 'The Time is Now for Third Party Funders & Defendants to Beat Their Swords Into Plowshares', Corporate LiveWire, 5 September 2012, available at: http://www.fulbrookmanagement.com/wp-content/uploads/2012/09/1Sep2012-Plowshares.pdf (addressing availability of funding for defendants).

23
Bogart, Christopher, 'Third Party Funding in International Arbitration', Burford (2013), p. 6, available at: http://www.burfordcapital.com/wp-content/ uploads/2013/02/Burford-article-Third-Party-v1.2internal-no-symbol.pdf.

24
See Kantor, supra note 3, at p. 71.

25
Kalicki, Jean, Endicott, Amy and Gir aldo-Carrillo, Natalia, 'Third-Party Funding in Arbitration: Innovation and Limits in Self-Regulation (Part 1 of 2)', Kluwer Arbitration Blog, 13 March 2012, available at: http://kluwerarbitrationblog. com/blog/2012/03/13/third-party-funding-in-arbitration-innovation-andlimits-in-self-regulation-part-1-of-2.

26
Scherer, Maxi, Goldsmith, Aren and Flechet, Camille ,'Third party funding in international arbitration in Europe: Part I: Funders' perspectives', International Business Law Journal issue 2 (2012), p. 207 at p. 211, available at: http://www. transnational-dispute-management.com/news/20120312.pdf.

27
See Toulson, Tom, 'RSM to pay for abandoned annulment process', Global Arbitration Review, 13 May 2011, available at: http://www.globalarbitration review.com/news/article/ 29458/rsm-pay-abandoned-annulment-process (reporting the claimant's allegations that a competitor had funded the state's legal fees and that the state's counsel "was complicit in a fraudulent scheme to award exploration licenses" to a competitor); see also RSM Production Corporation v. Grenada, ICSID case no. ARB/05/14, Order of the Committee Discontinuing the Proceeding and Decision on Costs, 28 April 2011, para. 64 (referencing a lawsuit brought by the investor against the host state's counsel in US federal court alleging violations of the US Racketeer Influenced and Corrupt Organizations (RICO) Act); RSM Prod. Corp. v. Fridman, 643 F.Supp.2d 382 (S.D.N.Y. 2009), aff'd 387 Fed.Appx. 72 (2d Cir. 2010); RSM Prod. Corp. v. Freshfields Bruckhaus Deringer U.S. LLP, 800 F.Supp.2d 182 (D.D.C. 2011), aff'd 682 F.3d 1043 (D.C.Cir. 2012), cert. denied, 568 U.S. - (7 January 2013).

28
Id.

29
Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID case no. ARB/10/7.

30
Peterson, Luke Eric, 'Uruguay Hires Law Firm and Secures Outside Funding to Defend Against Philip Morris Claim; Not the First Time an NGO Offers Financial Support for Arbitration Costs', IA Reporter, 20 October 2010, available at: http://www.iareporter.com/articles/ 20101023_4; 'Government of Uruguay Taps Foley Hoag for Representation in International Arbitration Brought by Philip Morris to Overturn Country's Tobacco Regulations', Foley Hoag LLP News Release, 8 October 2010, available at: http://www.foleyhoag.com/News Center/PressCenter/2010/10/08/Foley _Hoag_Uruguay_Philip_Morris.aspx.

31
Perry, Sebastian, 'Uruguay Won't Cave in on Tobacco Laws', Global Arbitration Review, 7 October 2010, available at: http://www.globalarbitrationreview. com/news/article/28794/uruguay-wont-cave-tobacco-laws.

32
Teinver S.A., Transportes de Cercanias S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic, ICSID case no. ARB/09/1, Decision on Jurisdiction, 21 December 2012, paras. 245-246 (footnotes omitted).

33
Teinver S.A., Transportes de Cercanias S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic, ICSID case no. ARB/09/1, Decision on Jurisdiction, 21 December 2012, para. 255 (citing Case Concerning the Arrest Warrant of 11 April 2000 (Democratic Republic of Congo v. Belgium), Judgment, 14 February 2002, 2002 I.C.J. Rep. 3, para. 26; Compañía de Aguas del Aconquija S.A. and Vivendi Universal v. Argentine Republic, ICSID case no. ARB/97/3, Decision on Jurisdiction, 14 November 2005, paras. 60, 61 and 63; Schreuer, Christoph, et al., The ICSID Convention: A Commentary (2nd ed. 2009), p. 92). With respect to ICSID arbitration, it should be noted that the key date on which the nationality of a juridical person must be established for jurisdictional purposes is the date of the parties' consent to ICSID arbitration. ICSID Convention, art. 25(2)(b). In most ICSID arbitrations, in which jurisdiction is based on a unilateral offer of consent contained in a treaty or in host state legislation, this will be the date on which the investor perfected the parties' consent by filing the request for arbitration. Schreuer, Christoph, et al., The ICSID Convention: A Commentary (2nd ed. 2009) pp. 203, 212.

34
Ceskoslovenska obchodní Banka, a.s. (CSOB) v. Slovak Republic, ICSID case no. ARB/97/4, Decision on Jurisdiction, 24 May 1999, para. 31.

35
Teinver S.A., Transportes de Cercanias S.A. and Autobuses Urbanos del Sur S.A. v. Argentine Republic, ICSID case no. ARB/09/1, Decision on Jurisdiction, 21 December 2012, para. 258.

36
Ceskoslovenska Obchodni Banka, a.s. (CSOB) v. Slovak Republic, ICSID case no. ARB/97/4, Decision on Jurisdiction, 24 May 1999, para. 32.

37
The Loewen Group, Inc. and Raymond Loewen v. United States of America, ICSID case no. ARB(AF)/98/3, Award, 26 June 2003, para. 220.

38
Id., at para. 237.

39
Id., at paras. 225-226.

40
Id., at paras. 237, 240.

41
See, e.g., de Brabandere, Eric and Lepeltak, Julia, 'Third Party Funding in International Investment Arbitration', Grotius Centre Working Paper No. 2012/21 (2012), at pp. 8-9, available at: http://ssrn.com/abstract=2078358; see Kantor, supra note 3, at p. 73.

42
See, e.g., UNCTAD, 'Recent Developments in Investor-State Dispute Settlement (ISDS)', IIA Issues Note no. 1 (May 2013), p. 25, available at: http://unctad.org/en/PublicationsLibrary/webdiaepcb2013d3_en.pdf.

43
Landi, Niccolò 'The Arbitrator and the Arbitration Procedure: Third Party Funding in International Commercial Arbitration - An Overview', in Christian Klausegger et al., eds., Austrian Yearbook of International Arbitration (2012) p. 85 at p. 95.

44
See generally van Boom, supra note 11, at p. 49 (citing Molot, Jonathan, 'Litigation Finance: A Market Solution to a Procedural Problem', Georgetown Law Journal 99 (2010), p. 65 at pp. 70-73 to discuss litigation risk aversion as a motive for settlement transactions and thus argue how it seems plausible that, in litigation, third-party financing may increase leverage for the claimant and incentives for settlement on the defendant - provided that the defendant is aware of the third-party funder's involvement, which conveys confidence in the quality of the claimant's claim).

45
See infra text accompanying note 124.

46
Veljanovski, Cento, 'Third Party Litigation Funding in Europe', Journal of Law, Economics, & Policy 8 (2012), pp. 430-436, 440 and 448-449, available at: http://ssrn.com/abstract=1971502; Beisner, John et al., 'Selling Lawsuits, Buying Trouble: Third-Party Funding in the United States', U.S. Chamber Institute for Legal Reform (October 2009), at pp. 4-5 and 8-9, available at: http://www.instituteforlegalreform.com/images/stories/ documents/pdf/research/thirdpartylitigationfinancing.pdf.

47
Abaclat et al. v. Argentine Republic, ICSID case no. ARB/07/5, Decision on Jurisdiction and Admissibility, 4 August 2011, para. 541.

48
Id., at paras. 88, 458 and 462.

49
See, e.g., ICSID Convention, art. 61(2) ("the tribunal shall, except as the parties otherwise agree, assess the expenses incurred by the parties in connection with the proceedings, and shall decide how and by whom those expenses, the fees and expenses of the members of the Tribunal and the charges for the use of the facilities of the Centre shall be paid."); UNCITRAL Arbitration Rules, art. 42(1) ("The costs of the arbitration shall in principle be borne by the unsuccessful party or parties. However, the arbitral tribunal may apportion each of such costs between the parties if it determines that apportionment is reasonable, taking into account the circumstances of the case.").

50
_ATA Construction, Industrial and Trading Company v. Hashemite Kingdom of Jordan, ICSID case no. ARB/08/2, Order Taking Note of the Discontinuance of the Proceeding, 11 July 2011, para. 34 (quoting Ioannis Kardassopoulos and Ron Fuchs v. Georgia, ICSID cases nos. ARB/05/18 and ARB/07/15, Award, 3 March 2010, para. 691; and RSM Production Corporation v. Grenada, ICSID case no. ARB/05/14, Order of the Committee Discontinuing the Proceeding and Decision on Costs, 28 April 2011, para. 68).

51
See Peterson, supra note 13 ("Selvyn Seidel, Chair of Fulbrook Management, LLC, a U.S./U.K.-based litigation funder, says that there is what he calls a 'Bermuda Triangle' where the interests of a claimant, the claimant's lawyers and a funder may no longer be in complete harmony. For example, one may want to settle for noneconomic reasons - such as getting out of prison - while the other may remain motivated by economic reasons.").

52
See, e.g., Peterson, supra note 13; Barrett, Paul, 'Trapped in Tbilisi', Bloomberg Businessweek, 24 February 2011, available at: http://www.businessweek.com/ magazine/content/11_10/b4218058741193.htm.

53
Ioannis Kardassopoulos and Ron Fuchs v. Republic of Georgia, ICSID cases nos. ARB/05/18 and ARB/07/15, Award, 3 March 2010, para. 693.

54
Ioannis Kardassopoulos and Ron Fuchs v. Republic of Georgia, ICSID cases nos. ARB/05/18 and ARB/07/15, Decision of the Ad Hoc Committee on the Stay of Enforcement of the Award, 12 November 2010, paras. 1, 45 (granting the stay on certain conditions).

55
Barrett, supra note 52.

56
Peterson, supra note 13.

57
Id.

58
Id.

59
See American Bar Association Commission on Ethics 20/20,supra note 9, at pp. 21-22.

60
Abu-Ghazaleh v. Chaul, 36 So.3d 691, 693 (Fla. Dist. Ct. App. 2009).

61
Id.

62
Id., at paras. 693-694.

63
See American Bar Association Commission on Ethics 20/20,supra note 9, at p. 22.

64
Id., at p. 21.

65
Id., at pp. 21-23.

66
Id., at pp. 21-23.

67
See Rancman v. Interim Settlement Funding, Corp., 789 N.E.2d 217, 221 (Ohio 2003) (describing the potential for third-party financing arrangements to prolong litigation and reduce settlement incentives).

68
Weaver, Bennett & Bland, P.A. v. Speedy Bucks, Inc., 162 F.Supp.2d 449, 450-451 (W.D.N.C. 2001).

69
Id.

70
Letter from Burford Group to Purrington Moody Weil LLP et al., 29 September 2011, available at: http://lettersblogatory.com/wp-content/uploads/2013/01/Burford.pdf.

71
Id.

72
Id.

73
Id.

74
See American Bar Association Commission on Ethics 20/20, supra note 9, at pp. 13-15, 30 (highlighting scenarios where lawyers are faced with ethical considerations).

75
Id.

76
Id., at pp. 32-34.

77
Id., at pp. 13-15, 22.

78
Id., at pp. 16.

79
Id.

80
See American Bar Association Commission on Ethics 20/20, supra note 9, at pp. 26, 28, 29.

81
Id., at p. 24.

82
Id., at p. 24.

83
Id., at p. 36.

84
In re Fordham, 668 N.E.2d 816, 822-823, 825 (Mass. 1996).

85
Id., at p. 823.

86
See American Bar Association Commission on Ethics 20/20, supra note 9, at p. 29 (describing Model Rules 1.8(f), 2.1 and 5.4(c) and how, if a third-party supplier attempts to interfere with the lawyer's professional judgment, the lawyer should withdraw from the representation).

87
Id., at p. 29 (describing the general rule that a lawyer may not share a fee with a non-lawyer). However, fee sharing with a non-lawyer is acceptable in some jurisdictions, such as in the District of Columbia. See Molot, supra note 44, at p. 111.

88
Id., at p. 29; see also Core Funding Group v. McDonald, No. L-05-1291, 2006 WL 832833, *5, *7 (Ohio Ct. App., 31 March 2006) (acknowledging that contract law governs the relationship between a creditor and debtor and that an attorney may assign the attorney fees owed to her under a contingency fee agreement to a creditor because she is transferring her contractual rights under the contingency fee agreement); PNC Bank, Delaware v. Berg, No. 94C-09-208-WTQ, 1997 WL 527978, at *11 (Del. Super. Ct., 31 January 1997) (asserting as a matter of law that a bank was not precluded from taking a security interest in the hourly billing and contingent fee contracts of a law firm, as "contract rights" collateral, for repayment of a loan made to the law firm).

89
See sources cited supra note 88.

90
For the sake of full disclosure, the authors' law firm, White & Case LLP ,was counsel to Romania in the ICSID arbitration, S&T Oil Equipment and Machinery Ltd. v. Romania, ICSID case no. ARB/07/13. All information related here, however, is derived from public sources and should not be attributed to White & Case or its clients.

91
See Raymond, supra note 12.

92
S&T Oil Equipment and Machinery Ltd. v. Romania, ICSID case no. ARB/07/13, Order of Discontinuance of the Proceeding, 16 July 2010, para. 32.

93
See Raymond, supra note 12.

94
Vasani, Baiju, 'Third-party funding snapshots: United States', Global Arbitration Review News, 30 March 2012, available at: http://www.globalarbitrationreview. com/journal/article/30381/third-party-funding-snapshots-united-states.

95
Leader Techs., Inc. v. Facebook, Inc., 719 F.Supp.2d 373 (D.Del. 2010).

96
Id., at p. 376.

97
Id.

98
Id.

99
Id., at pp. 376-377.

100
Id., a t p . 376.

101
Id., a t pp . 376-377.

102
Devon IT, Inc. v. IBM Corp., No. 10-2899, 2012 WL 4748160, *at 1 (E.D.Pa. 2012).

103
Id.

104
Id.

105
Id.

106
Arkin v. Borchard Lines, Ltd. No. 2, [2005] EWCA Civ. 655.

107
Id.

108
See, e .g., Libananco Holdings Co. Limited v. Republic of Turkey, ICSID case no. ARB/06/8, Decision on Preliminary Issues, 23 June 2008, para. 57 ("The Tribunal is not aware of any established practice on the part of ICSID Tribunals in favour of granting security for costs either to a Claimant or to a Respondent. Asked during the oral hearing for its most favourable authority supporting the granting of security for costs, even by analogy, counsel for the Respondent was in some difficulty to name anything specific. In these circumstances, the Tribunal takes the view that it would only be in the most extreme case - one in which an essential interest of either Party stood in danger of irreparable damage - that the possibility of granting security for costs should be entertained at all."); Guaracachi America, Inc. and Rurelec Plc v. Plurinational State of Bolivia, UNCITRAL/PCA case no. 2011-17, Procedural Order No. 14, 11 March 2013, para. 6 ("Although investment treaty tribunals clearly hold the power to grant provisional measures, an order for the posting of security for costs remains a very rare and exceptional measure.").

109
Steinitz, Maya, 'The Litigation Finance Contract', William and Mary Law Review 54 (2012), p. 455 at p. 468.

110
Id.

111
Id., a t p . 469.

112
See Association of Litigation Funders of England & Wales, Code of Conduct Key Aspects (2012), available at: http://associationoflitigationfunders.com/code-of-conduct/key-aspects .

113
Id.

114
Id.

115
Champerty is a type of "maintenance" and occurs when a "champertor", or third party, makes an arrangement to provide financial support for litigation for the plaintiff or defendant in exchange for a portion of the party's recovery. Osprey, Inc. v. Cabana Ltd. P'ship, 532 S.E.2d 269, 273 (S.C. 2000).

116
Maintenance occurs when a third party provides assistance to another in prosecuting a suit. Osprey, Inc. v. Cabana Ltd. P'ship, 532 S.E.2d 269, 273 (S.C. 2000).

117
Osprey, Inc. v. Cabana Ltd. P'ship, 532 S.E.2d 269, 273-274 (S.C. 2000).

118
Id.

119
Id., at p. 274 (citing Radin, Max, 'Maintenance by Champerty', California Law Review 24 (1935), p. 48 at p. 58-64).

120
Id., at p. 277.

121
See id., at p. 276.

122
See American Bar Association Commission on Ethics 20/200, supra note 9, at pp. 10-11 (describing how only two US states prohibit any form of maintenance and discussing how the consistent trend across America is towards limiting the common law prohibition of champerty).

123
Davis, W. Kent, 'The International View of Attorney Fees in Civil Suits: Why Is the United States the "Odd Man Out" in How it Pays its Lawyers?', Arizona Journal of International & Comparative Law 16 (1999), p. 361 at pp. 375-377.

124
See Taylor v. Bemiss, 110 U.S. 42, 45-46 (1884); Stanton v. Embrey, Adm'r, 93 U.S. 548, 557 (1876).

125
Davis, supra note 123, at p. 377 n. 103.

126
American Bar Association Commission on Ethics 20/20, supra note 9, at pp. 10-11.

127
Osprey, Inc. v. Cabana Ltd. P'ship, 532 S.E.2d 269, 278 (S.C. 2000); see also Davis, supra note 123, at p. 381.

128
See ABA Model Rule 8.5(B)(2), which applies a "center of gravity test" to determining the applicable ethical rules.

129
Lamm, Carolyn, Pham, Hansel and Giorgetti, Chiara, 'Has the Time Come for an ICSID Code of Ethics for Counsel?', Yearbook on International Investment Law & Policy 2009-2010 (2010), p. 275.