Ukraine - Part II Country Report - Handbook on Third-Party Funding in International Arbitration
Originally from Handbook on Third-Party Funding in International Arbitration
1.1. TPF Regime in Ukraine
1.1.1. Is TPF commonly used in your Jurisdiction? If yes, since when (is it a new trend or a well-established practice)?
Third-Party Funding is generally not commonly used in Ukraine. The only form of TPF which is rather common is law firms handling cases under a conditional fee agreement.
1.1.2. Please shortly describe the TPF market in your Jurisdiction. Is it dominated by local or international Funders, which type of Funders are active, which cases get typically funded? Is there any source on Funders (like the overview published by the German Bar)?
As mentioned above, the only type of Funders active on the Ukrainian market are law firms acting on the basis of a conditional fee agreement.
1.1.3. Are there any statutes or case law dealing with TPF or regulating Funders? If yes, please address these.
There is no legislation or case law in Ukraine expressly regulating TPF or the activities of Funders. Any issues arising in connection with TPF would therefore have to be resolved on the basis of general provisions of Ukrainian law.
1.1.4. Are there any legal restrictions? To what extent do common law concepts like champerty, maintenance, barratry, or comparable civil law concepts as usury or prohibition of pactum de quota litis affect TPF? Can a law firm act as a Funder?
The Ukrainian law does not impose express restrictions on TPF.
In respect of law firms acting on the basis of contingent fees, the Law of Ukraine “On The Bar and Advocate’s Practice” (hereinafter – the “Advocate Law”) applies to such arrangements, in particular, article 30 of the Law regulating advocate fees. Article 30 provides that the fees should take account of the complexity of the case, the qualification and experience of the advocate, financial condition of the client and other material circumstances. The fees must be reasonable and take account of the time expended by the advocate.
Hence, there is a theoretical possibility of contingent fees agreements being challenged on the basis of this provision. However, it should be noted that the criteria used, such as reasonableness or correlation with the time spent, are not precise and in practice it would be difficult to demonstrate that they were not complied with. The law does not specify any criteria how