Third-Party Funding in Dispute Resolution Proceedings

Abstract

Third – Party Funding (“TPF”) is the funding of claims by commercial bodies in return for a share of the proceeds. TPF is rapidly used around the world and is a crucial mechanism of enabling meritorious claimants who are financially incapable to afford litigation expense to gain access to justice.

Despite the fast-changing global trend of TPF in other jurisdictions, Thai law lacks a clear, direct written rule and position on this matter. However, Thai courts have long been reluctant to enforce a contract that permits an outside third party to benefit from the outcome of the dispute, as it contravenes public order and good morals. The lack of clear legal position raises the question as to whether the use of TPF should be allowed in Thai legal system.

After conducting historically and comparatively analysis, this article concludes that a TPF contract, which strengthens access to justice and does not abuse the process, should not be regarded as being against public policy. However, the legislative should be amended to clearly allow the use TPF and to eliminate uncertainty. Further, funders should be regulated by the adoption of proper regulations like those established in other jurisdictions.

 Keywords: Third – Party funding, Litigation, Arbitration, Dispute resolution proceedings