Slovakia - Country Report - Handbook on Third-Party Funding in International Arbitration- Second Edition

First, it is still relatively cheap to initiate and pursue even high-value claims before Slovak courts. Court fees are capped and legal fees for domestic court cases tend to be low compared to other jurisdictions when calculated by reference to hourly rates.

Second, given that Slovak lawyers are allowed to accept success-based fee arrangements (of up to 20% of the value of a successful outcome) impecunious claimants have traditionally been able to have their cases de facto funded by their counsel, although even that practice is quite rare.

Third, the excessive length of proceedings before Slovak courts (which may involve up to four court instances in some cases) and great unpredictability of outcome act as strong dissuading factors to any potential investors.

Moreover, the absence of any legal framework regulating TPF creates uncertainty and poses risks for the funders, who are therefore bound to operate without a clear framework. Although there is no express prohibition of TPF under Slovak law (and success-fee arrangements with counsel are specifically allowed up to 20% of the successful outcome) the conditions are not there yet for the third-party industry to establish itself on the Slovak market.

1.2. Is it dominated by local or international Funders? Which Funders are active? Which cases typically get funded?

Although TPF is not a common practice in Slovakia, when TPF does occur, it usually involves claimants’ counsel or their parent entities or ultimate beneficiary owners acting as funders. In arbitration cases, it is more likely to come across professional TPF funds with more resources and experience.

The cases that typically get noticed and attract TPF are those of high-value and complexity.