The CIArb’s Guidance on Third-Party Funding: Codifying Best Practice and Shifting the Debate

The Chartered Institute of Arbitrators (“CIArb”) published its Guideline on Third-Party Funding (“Guideline”) in September 2025, setting out a framework for the use and disclosure of funding in international arbitration. The publication marks an important moment. It reflects how far the funding industry has come, from being viewed with suspicion to becoming an accepted, even expected, feature of high-value disputes.

As CEO of Woodsford, a collective redress business that includes one of the world’s leading litigation funders, and as a lawyer who has written extensively on the subject, I welcome CIArb’s contribution. The Guideline represents another step in arbitration’s steady normalisation of funding, providing helpful soft-law guidance on a financial and ethical landscape that is now central to the conduct of complex disputes.

From Prohibition to Professionalisation

The rise of third-party funding has been one of the defining developments in modern dispute resolution. The Association of Litigation Funders (“ALF”) in the United Kingdom and the International Legal Finance Association (“ILFA”) globally, both of which Woodsford helped found, are the two leading representatives bodies for third-party funding. They have a shared goal of embedding standards of transparency, independence, and capital adequacy.

Today, the same principles underlie the Guideline. It is not regulation in a formal sense but is designed to promote consistency, ethical conduct, and disclosure across jurisdictions and institutions. It sits alongside earlier soft-law instruments, such as the ICCA–Queen Mary Task Force Report and institutional rules of the International Centre for the Settlement of Investment Disputes (“ICSID”), International Chamber of Commerce (“ICC”), Hong Kong International Arbitration Centre (“HKIAC”), Dubai International Arbitration Centre (“DIAC”), Vienna International Arbitration Centre (“VIAC”), and China International Economic and Trade Arbitration Commission (“CIETAC”), each of which now includes provisions on third-party funding.

Disclosure and Conflicts: The Core of the Guideline

At the heart of the CIArb Guideline lies the duty of disclosure. Funded parties are expected to inform the tribunal, other parties, and relevant institutions of both the existence of a funding arrangement and the identity of the funder.

This approach echoes the institutional consensus that has emerged. For example:

• ICSID Rule 12 requires early disclosure of the funder’s name and ownership structure;
• ICC Article 11(7) mandates prompt notification of any non-party with an economic interest in the outcome;
• HKIAC Article 44 and DIAC Article 22 impose similar obligations.

Each seeks to mitigate potential conflicts of interest by ensuring arbitrators can verify any connections between themselves, the parties, and the funder.

The Guideline translates these norms into practitioner-focused guidance. It advises disclosure not as a courtesy but as a duty integral to fairness and impartiality. Importantly, it draws a clear line between legitimate transparency and intrusive inquiry: it does not require disclosure of the terms of the funding agreement itself, unless specifically ordered by the tribunal.

The Guideline does not prescribe the exact timing of disclosure beyond promptness. In contrast, some institutional rules specify disclosure upon registration or immediately upon concluding a funding arrangement.

Conflicts Beyond the Tribunal

The Guideline extends the notion of conflict to relationships not just between arbitrators and funders, but also between funders and counsel. This reflects the recent provisions in the updated IBA Guidelines on Conflicts of Interest (2024), which treat funders as entities with a direct economic interest in the outcome.1

Control, Independence, and Ethical Boundaries

The Guideline rejects the notion that third-party funding hands control of the dispute to the funders. On the contrary, it requires that funders must not influence strategic, procedural, or settlement decisions. Responsibility for the case remains with counsel and client. This mirrors the ALF Code of Conduct, which binds members to respect client autonomy, and to withdraw funding only under specified conditions.

The Guideline also encourages parties to ensure they have obtained any internal authorisations (for example, from corporate management or state entities) before entering a funding arrangement. This protects both the integrity of proceedings and the enforceability of any eventual award.

Costs and Security for Costs

Whether the existence of funding should affect cost allocation or security for costs generates debate. CIArb takes a pragmatic position: tribunals may consider funding, but it is neither presumptive evidence of impecuniosity nor of bad faith.

Two English cases illustrate a balanced approach to funding as a legitimate cost of pursuing justice: Essar Oilfields v Norscot [2016] EWHC 2361 (Comm) (a Woodsford case) and Tenke Fungurume v Katanga [2021] EWHC 3301 (Comm). In both, the English High Court upheld the successful claimant’s right to recovery of a funder’s fee from the losing defendant as part of “other costs.” These findings clearly view the claimant’s decision to obtain litigation funding in each case as reasonable.

On security for costs, recent investor–state jurisprudence suggests that funding alone does not justify security. Tribunals look for evidence of actual risk. See, for example, EuroGas v Slovak Republic (PO No. 3) and ICSID Rule 53. The focus should be on conduct and recovery risk, not the mere presence of funding.

Confidentiality and Privilege

Disclosure of funding or sharing information with a funder does not waive privilege or breach confidentiality when done under appropriate agreements. Institutions recognise this. HKIAC Article 45.3(e) expressly permits disclosure for the purpose of seeking funding, and Article 13(a) of the VIAC rules an Article 48 of the CIETAC rules likewise address funding transparency.

The Broader Significance: A Step Toward Convergence

The CIArb Guideline does not regulate funding globally. Instead, it promotes convergence through soft law and professional consensus, following the path of the ICCA–Queen Mary Task Force Report. What CIArb adds is accessibility: short, readable guidance for practitioners who may not specialise in funding but increasingly encounter it.

The timing is significant. Liberalisation continues across the world of international arbitration. Recent developments include Nigeria’s Arbitration and Mediation Act 2023 recognising third-party funding and Malaysia’s 2024 amendments introducing a statutory framework. CIETAC’s 2024 rules (Article 48) and ICC 2021 rules reinforce near-universal disclosure norms.

What the Guidance Means for Arbitrators and Counsel

For arbitrators: ask early whether funding is in place; ensure conflict checks cover funders and affiliates; record disclosures in procedural orders; and, when allocating costs, consider funding without punitive reasoning.

For counsel: treat disclosure as part of case management; coordinate with funders early to avoid procedural friction; and protect privilege through structured non-disclosure agreement (NDA) processes.

For funders: maintain capital adequacy, respect confidentiality, and ensure clear contractual terms. Compliance with ALF and ILFA frameworks already meets, and in many respects exceeds, the CIArb’s expectations.

Conclusion: From Guidance to Governance

The CIArb Guideline does not break new ground, but it performs a consolidating function. It confirms that funding is an embedded, legitimate component of the arbitral ecosystem. The future of funding regulation will likely evolve through converging institutional practice. As arbitral rules, judicial decisions, and industry standards align, parties and tribunals gain predictability without sacrificing flexibility.

For those, including the author, who have long advocated responsible funding, including through ALF, ILFA, and publications such as The Law and Business of Litigation Finance, the CIArb intervention is welcome. Transparent, ethical funding enhances access to justice and strengthens the legitimacy of international arbitration.

• 1A long time ago, when an associate in the international arbitration team at Debevoise & Plimpton, I assisted the working group that drafted the very first version of the IBA Guidelines. Third-party funding barely existed at that point. How far we have come.