MinLaw extends TPF framework to more legal proceeding categories

This will allow more businesses to have an alternative avenue to fund meritorious claims.

The Ministry of Law (MinLaw) announced that it will extend the third-party funding (TPF) framework from 28 June 2021. 

The categories of proceedings for which TPF is permitted will be extended to include domestic arbitration proceedings, court proceedings arising from or connected with domestic arbitration proceedings, proceedings commenced in the Singapore International Commercial Court (SICC) as long as these remain in the SICC, appeal proceedings arising from any decision made in the proceedings in the SICC, and mediation proceedings relating to any of the aforementioned.

MinLaw said in its statement that against the backdrop of the COVID-19 pandemic, there may be a rise in disputes and companies facing the risk of insolvency.

Additional funding options such as TPF will offer another solution for these litigants, to enable them to pursue meritorious claims in permitted proceedings instead of foregoing to pursue their legal rights.

The framework for TPF was first introduced in 2017, mainly focused on international arbitration proceedings and related court and mediation proceedings. This was received positively and as a result, businesses have shown increasing interest in additional options for financing litigation. 

Respondents to MinLaw’s public consultation in 2018 on the TPF framework supported the extension of the framework to include more categories of proceedings.

To have these new changes take effect accordingly, amendments will be made to related laws and rules. 

Local lawyers and certain foreign lawyers involved in proceedings funded through TPF must continue to abide by professional conduct rules set out in the Legal Profession (Professional Conduct) Rules 2015, whilst registered foreign lawyers involved in SICC proceedings will need to follow the amendments to be made in the Legal Profession (Representation in Singapore International Commercial Court) Rules 2014 (Representation in SICC Rules).

Similarly, related amendments will also be made to the Rules of Court with regard to orders for adverse costs and security for costs where TPF is involved in proceedings before the SICC.