Originally from Handbook on Third-Party Funding in International Arbitration, Second Edition

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Introduction

At the EU level, third-party arbitration funding as an activity is not subject to specific regulation,  in line with the nascent status of third-party dispute funding in the EU more generally. However, this may change in the near future, given that a recent proposal to regulate third-party litigation funding, whether by oversight or by design, also extends to third-party arbitration funding.  While at present it is not certain that this proposal will become law, the EU level is worth paying attention to because the consensus in Brussels seems to be that third-party funding is inherently a problem to be regulated, rather than an opportunity to increase access to justice  in the face of expensive proceedings. This perception, if left unchallenged, is likely to ultimately colour regulatory attempts even at the Member States’ level.

This chapter discusses the EU regulation of third-party arbitration funding both de lege lata and in terms of the general scope for legislative activity at the EU level de lege ferenda. It begins by highlighting that, at the date of writing, there is no EU law directly concerning third-party arbitration funding (II), before assessing the limited extent to which EU primary law would even permit such regulation (III). The chapter then briefly describes (IV) a recent proposal to regulate litigation funding which would, as presently drafted, also extend to the funding of arbitration, before closing by describing the approach taken by the EU to third-party funding in investment arbitration, where recent EU bilateral investment treaties contain a duty to disclose the existence of third-party funding (V).