On 11 September 2025, CIArb released its Guideline on Third-Party Funding (TPF), a resource designed to provide clarity and practical guidance to parties, counsel and arbitrators engaging with funding arrangements in international arbitration.
The Guideline is divided into two main parts. Part 1 explains the funding process, from approaching a funder to negotiating and finalising a litigation funding agreement (“<span class="news-text_medium">LFA</span>”). It highlights critical provisions such as pricing structures, portfolio arrangements and “waterfall” clauses that determine how recoveries are distributed between the funder and funded party. It also stresses the importance of due diligence on funders and introduces after-the-event insurance as a potential component of the funding structure.
Part 2 focuses on the conduct of arbitrations involving funded parties. It outlines the expected involvement of funders in strategic decisions — such as settlements and the choice of arbitrators — and underscores the significance of complying with applicable laws and arbitral rules on disclosure. The guideline suggests that early disclosure of funding can mitigate disruption later in the proceedings. The document further addresses issues such as security for costs, non-party payments of advances and disputes arising from settlement offers.
Drafted with input from funders, practitioners and arbitrators, the Guideline offers a practical, balanced perspective and is expected to be particularly valuable for parties less familiar with third-party funding. It represents a step towards greater transparency and consistency in the use of funding in international arbitration.
