Will Ireland’s Prohibition on Third-Party Funding Impact Its Development as an International Arbitration Hub?

Ireland was recently announced as the EMEA hub for the ICDR. The arguments in its favour are obvious. Ireland is one of only two English-speaking EU members. It is home to many multinational companies, and it has a predictable legal system. The question then arises: Is Ireland developing into the next international arbitration hub? On the surface, it may seem like all the pieces are already in place. However, there remains one critical issue which Ireland has yet to contend with, that of Third-Party Funding ("TPF").

As highlighted by a previous blog post, Ireland took nearly all the relevant steps to disapply the law prohibiting TPF from international commercial arbitration in 2023. However, this process was never finished. Therefore, TPF in Ireland remains an offence and a tort under ‘champerty and maintenance’. To consider whether the illegality of TPF in Ireland impacts its ability to become an international arbitration hub, this post will first discuss the development of the Irish arbitral market, and TPF globally. It will then outline the legal situation in Ireland, and finally, it will conclude that the illegality of TPF in Ireland may limit its development as an international arbitration hub.

Is TPF Relevant to the Type of Arbitration Ireland Is Seeking to Attract?

Third-Party Funders have a minimum claim value for cases they will consider funding. In Europe, this minimum is frequently set at 1 million euros. Thus, if Ireland's future arbitral cases are low-value, regardless of any legislative prohibition, TPF may be unavailable, rendering the issue moot. According to the World Atlas of Arbitration, between 2020 and 2024, the average value of an ICDR claim was 7.39 million USD. Thus, the ICDR deals with cases that might seek TPF.

With the announcement of the new ICDR branch, Ireland stated that it is seeking to further its connections with US multinational companies. Due to their size, they are most likely to be involved in higher-value claims. TPF is at issue for the exact kind of arbitration Ireland is attempting to attract.

Global Development of TPF 

Arbitration was originally litigation's cheaper alternative. However, it is now undisputed that arbitration can rival litigation in terms of costs. In fact, in 1989 Lord Mustill stated that “hotel bills alone may now surpass what would have [previously] been the entire cost of an arbitration”. This substantial increase in the cost of arbitration led to the development of the TPF industry. 

Despite continued discussions about the risks of TPF over the past 20 + years, its popularity has only grown. Simply put, TPF has become an unavoidable part of the international arbitration landscape. In fact, between 2022 and 2026, 16% of cases heard before ICSID were backed by Third-Party Funders. This aligns with the statements made by heads of various Third-Party Funders, who claim that every year, there are more requests for funding.

The reasons companies choose to avail themselves of TPF are varied. The most commonly noted benefit is “access to justice”: claimants who otherwise would be unable to bring a claim are able to do so through TPF. Nonetheless, part of the growth of Third-Party Funders also stems from the fact that they can remove the risk of taking a claim from a company's balance sheet. Third-Party Funders also provide potential legal expertise. These factors help explain the rapid growth of the TPF market.

The approach to the regulation of TPF varies by country. Jurisdictions like Singapore and Hong Kong offer clear statutory permission for TPF and an established regulatory framework. The TPF industry in England is also well-established despite its contrasting approach to TPF regulation. In 2025, the Civil Justice Council outlined that regulation of TPF should not apply to arbitration, and that this regulation is best left to arbitral institutions. The LCIA Rules have not yet specifically provided for the regulation of TPF. Ireland is competing directly with markets that take varying approaches to the regulation of TPF while providing no clarity of its own.

As previously outlined, the cases to be arbitrated in Ireland are likely to be expensive and potentially complex. They will likely relate to large international companies, in particular US multinationals. These companies are likely to want to shift risk and benefit from the due diligence conducted by Third-Party Funders, or, in the case of smaller companies, ensure they can take claims during times of financial instability. Therefore, they will likely be looking for TPF. In comparison to other jurisdictions, Ireland is less attractive in this regard.

The Situation in Ireland as It Stands

In Persona Digital Telephony v Minister for Public Enterprise [2017] IESC 27, the Supreme Court reaffirmed that the offences and torts of maintenance and champerty remain part of Irish law, leaving Ireland as one of the few common law jurisdictions to outlaw TPF. The judiciary closed the door on funding for litigation and arbitration without legislative changes.

July 2023 marked a shift in the landscape with the enactment of the Courts and Civil Law (Miscellaneous Provisions) Act 2023, which amended the Arbitration Act 2010 ("AA 2010") to provide that maintenance and champerty do not apply to international commercial arbitration, alongside court proceedings arising from such arbitrations, appeals from those proceedings, and mediation or conciliation connected to such arbitrations.

The 2023 amendment is significant, marking a huge step in the right direction for Ireland’s development as a hub of international arbitration. This step, however, is yet to be actualised. The 2023 amendment to the AA 2010 requires commencement, which is long-awaited at this stage. No official explanation for this delay has been provided. Until this happens, TPF in Ireland is prohibited.

Implications for Ireland’s Standing as an Arbitration Hub

Ireland has made a deliberate push to position itself as a seat of arbitration that is neutral, common‑law, arbitration-friendly, English‑speaking, and part of the EU. The amendment to the AA 2010 was intended to remove a major competitive disadvantage.

The recent opening of the ICDR EMEA branch in Ireland serves as a reminder of the need to commence the amendment to the AA 2010. One would expect that with the opening of the new ICDR branch, Ireland would become a more prominent seat for international commercial arbitration in the EMEA region. However, Ireland's prohibition on TPF may hamper that strong position.

As outlined in a leading arbitration textbook, Redfern and Hunter on International Arbitration, flexibility is a key component required by parties to international commercial arbitration. They often do not know at the contract‑drafting stage whether they will need TPF. Funding decisions usually arise after a dispute begins, when costs escalate, cash‑flow pressures appear, or the commercial decision might be taken to manage risk and remove the cost from the balance sheet. Consequently, choosing Ireland at the time of contracting closes the door on any potential future TPF, when the parties do not yet know their financial position at the time the claim will be taken. A seat that offers clear, unconditional access to TPF is therefore more attractive. Permitting TPF would make Ireland more attractive for international arbitration, which was the justification for the 2023 amendment.

There is no indication as to the regulatory framework to be implemented should TPF become legal. The amendment merely provides that the Minister may prescribe regulation. Market confidence is of utmost importance in the TPF industry, and as such, clarity on regulation is required.

Enforceability is one of the primary benefits of arbitration. Under the New York Convention, the recognition and enforcement of an award may be refused where it would be contrary to the public policy of the country. On a plain reading of this provision, a foreign award could be unenforceable in Ireland if either party had relied on TPF during the arbitral proceedings. Scully v Coucal [2025] IESC 20, a recent Supreme Court decision, clarifies that this is unlikely. The appeal turned on the question of whether enforcement of a Polish judgment could be refused under the Brussels Recast Directive on the grounds of public policy where there had been an assignment of a cause of action. Like the consideration at hand, assignment of a cause of action was held by the Court to “savour of champerty”. The Court held that enforcement would only be denied, where the public policy issue went to the “very core of…the legal order, and [is] antithetical to that legal order itself that it simply cannot be permitted even indirectly”. Therefore, the current ban on TPF is unlikely to affect the enforcement of foreign arbitral awards in Ireland.

Conclusion

While the prohibition on TPF may serve to push some arbitration out of Ireland, the country is still well-placed to develop its arbitral market. Hopefully, the recent ICDR announcement will drive new arbitration into Ireland, and allow it to develop into an international arbitration hub in the years to come. However, the 2023 amendment to the AA 2010 must be commenced; it is one of the key factors holding Ireland back as a hub of international commercial arbitration.