CYIL vol. 7 (2016)

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ONDŘEJ SVOBODA – JAN KUNSTÝŘ CYIL 7 ȍ2016Ȏ
a B.A. degree in International Area Studies from the Faculty of Social Sciences,
Charles University in Prague. From 2009 to 2010 he studied international relations
and politics at the University of Kent under the Erasmus programme. Currently,
he is attending a Ph.D. course in international public law at the Faculty of Law of
Charles University. His main fields of interests include international investment
law, WTO law and the European Union’s common trade policy.
Mgr. Bc. Jan Kunstýř, LL.M. is currently interning in the Arbitration/Litigation
department of Fried Frank Harris Shriver & Jacobson in London. He graduated
from the Faculty of Law, Charles University in Prague and holds an LL.M. in
Investment Treaty Arbitration from Uppsala University. He holds the equivalent
of a B.A. degree in International Area Studies from the Faculty of Social Sciences,
Charles University in Prague. Furthermore, he spent a year as an exchange student at
the Tokyo University of Foreign Studies. His main fields of interest are international
Commercial and Investment Treaty Arbitration, Financial Law and Space Law.
Introduction
Large international arbitrations can have enormous financial consequences for the
parties involved. Legal fees and expenses are usually difficult to predict and often exceed
their estimates. It is therefore no surprise that three quarters of law firms acknowledge
that funding is now a central part of their discussions with clients. 1 Sometimes
a specialised company, a third party funder (TPF), agrees to pay some or all of the
claimant’s or the respondent’s costs in exchange for a percentage of the proceeds of
a successful case, or a multiple of the financed costs, or another agreed upon amount.
Third party funding has been one of the hottest topics in international arbitration
practice for several years, and it can be expected that it will remain under the spotlight
for a long time. Demand for such funding will most likely grow, especially as expenses
associated with investment treaty arbitration have been continuously increasing.2 As
of 2016, some estimate that at least 40% of the current investment arbitration claims
have either secured or explored potential funding from TPFs.3 In fact, thanks to
a practice called crowdfunding, which enables funding a project by raising many
small sums of money from a large number of people, anybody can become a TPF in
investment arbitration.4
1 Global Litigation Top 50 2015 (The Lawyer Market Reports), p. 4.
2 SUSANNA KHOURI, KATE HURFORD, CLIVE BOWMAN, ‘Third party funding in international
commercial and treaty arbitration – a panacea or a plague? A discussion of the risks and benefits of third
party funding’ (2011) 8(4) Transnational Dispute Management, p. 1.
3 ICCA-Queen Mary Task Force on Third-Party Funding in International Arbitration, Draft Report on
Security for Costs and Costs (1 February 2016), p. 16.
4 See Invest4Justice Litigation Crowdfunding >
accessed 9 May 2016.