Recent reports and surveys confirm two trends in international dispute resolution: Commercial arbitration is thriving in New York, and the use of third-party funding is on the rise. Are the two phenomena related? Arguably yes, as third-party funding alleviates commercial parties’ main complaint about arbitrating international disputes: soaring legal costs. Turning to third parties to pay for legal fees can be an attractive option for parties seeking to manage risk and to offlay costs in pursuing meritorious claims in international arbitration.

Commercial Parties Prefer International Arbitration

Parties engaged in international commerce clearly prefer international arbitration over other dispute resolution mechanisms when entering into cross-border contracts. In May 2018, the School of International Arbitration at Queen Mary University of London and White & Case released the fourth edition of their industry-leading survey on international arbitration, based on 922 questionnaire responses and 142 in-person or telephone interviews. A remarkable 99 percent of respondents said they would choose or recommend international arbitration to resolve cross-border disputes in the future. “Despite the fact that international arbitration as a system is not without its flaws, it remains the best available option in the view of its users,” notes the report accompanying the survey results.