Originally from The Law and Practice of International Arbitration: Essays in Honor of John Fellas – Preview Page

The costs associated with litigation and arbitration have significantly increased in the past decade making it challenging for parties to pursue or defend claims without substantial financial investment. Arguably, this drastic increase in litigation and arbitration costs has pushed many litigants into exploring alternative avenues of financing their litigation or arbitration. One such alternative avenue of litigation finance is Third-Party Funding (TPF). The use of TPF has grown exponentially in the past decade because it allows parties to effectively prosecute or defend their claims without bearing the high upfront expenses on a non-recourse basis if the claims are unsuccessful. Despite its rapid growth, TPF remains largely unregulated, particularly in African common law jurisdictions where it is prohibited by the common law prohibitions of maintenance and champerty or by professional conduct provisions applicable to legal practitioners. This paper argues for the regulation of TPF in African common law jurisdictions, rather than its outright prohibition, to create a stable legal framework that allows for investment in the TPF industry while simultaneously increasing access to justice for many citizens. By examining the market realities of TPF and drawing lessons from other jurisdictions, this essay proposes a standards-based legal framework that balances both the public good and the interests of investors, promoting equitable development and ensuring that the right to access justice is not merely nominal but actual and effective for all citizens.