On 10 January 2017, Singapore’s Parliament passed the Civil Law (Amendment) Bill (Bill No. 38/2016) (the Bill) to amend Singapore law to permit third-party funding for certain categories of dispute resolution proceedings by: (a) abolishing the common law tort of maintenance and champerty; and (b) providing that third party funding contracts are not contrary to public policy or illegal for prescribed categories of dispute resolution proceedings. The Bill will enter into force after it receives the assent of the President and is published in the Government Gazette (or on such other date as specified on publication in the Gazette).
The Bill only establishes the framework for third-party funding in Singapore; much of the detail is to be addressed in regulations to be promulgated after the Bill enters into force, including the criteria that a third-party funder must meet to fund a claim in Singapore, and the categories of dispute resolution proceedings for which third party funding will be permitted. It is anticipated that those categories will initially be limited to international arbitration proceedings and related court and mediation proceedings, although the potential exists for those categories to be broadened over time.
This is a positive development for dispute resolution in Singapore. Third-party funding (ie, the funding of the costs of dispute resolution proceedings by an unconnected third-party in expectation of a financial return) is an established feature of international dispute resolution. The Bill reflects Singapore’s recognition of that reality and facilitates its ability to offer commercial parties the same financing and risk management tools available to them in other leading international dispute resolution centres, such as London, New York, Paris and Geneva.
We continue to monitor the progress of the Bill and associated regulations and will report on further developments as they arise.