Arbitration is quicker and more cost-effective than court. And no one likes paying legal bills.
Life can be strange, however, and, in the arbitration context, perhaps neither of these “truisms” stands up any longer. It is now generally accepted that arbitration is at least as expensive as litigation, and takes just as long. More surprisingly perhaps, there are now people who actually want to get your lawyers’ invoices. Imagine that you have a sound claim against another party – Party A – which has to be resolved in arbitration. Party A is unscrupulous but wealthy. He could pay your claim if he wanted to. His assets are in a place where arbitral awards are easily enforceable. And he knows something you wish he did not: that a consequence of what he has done to you is that you can no longer afford to pay for a contested arbitration case.
Party A, therefore, refuses to pay your claim, because he can. He knows you cannot afford to chase him. He does not care about his reputation. He has no incentive even to negotiate a discounted settlement. In short, Party A holds all the aces.
In some countries, your financial problem might be solved by state-funded legal aid, but that is rarely available for commercial disputes. Likewise, contingency fee arrangements with lawyers are forbidden in many places, and it can be illegal to ask a disinterested third party to pay your costs in return for a percentage.
There is good news, however. As a result of recent amendments to Hong Kong’s Arbitration Ordinance, it is now legitimate to get financial assistance from a third party to pursue your case in an arbitration taking place in, or being run from, Hong Kong, in return for a share of the recovery.
Obviously, there is no such thing as a free lunch. The so-called “third party funder” will typically receive about 30% of your winnings, but you may sleep easier knowing that your rights are being asserted, that your legal expenses are being paid for you, and that if the unthinkable happens, and you lose, the funder will cover Party A’s costs, too.
Third party funding is likely to be extremely attractive to capital-challenged claimants. But even well-off claimants may have a use for it. They might take the view, for instance, that the cost of the funder’s cut is acceptable if it enables them to have their cake and eat most of it. They pursue their claims at someone else’s expense while spending their money on something else more profitable.
If what you have read so far encourages you to think that third party funding may be for you, please read on and pay attention to a few tips.
First, do your due diligence. Don’t just shop for the best price, but instead identify a potential funder in a mindful way. For instance, the funder needs to be able to see your claim through. Hong Kong permits a broad range of potential funders, and while the financial risk associated with well established international funders may be low, smaller funders or market entrants need more scrutiny, although under a draft Code of Conduct (not yet finalized), funders must have sufficient assets to fulfil their obligations for at least 36 months.
Second, ask yourself if your case is as fascinating as you think it is. You have lived with your case against Party A for a while. You know the facts and its subtleties inside out. But do not mistake funders for charities. They are hard-headed investors who are in it for the money. They will look carefully under the hood of your case before taking it on. Investment criteria are likely to vary between funders, but they will generally require, among other things, good merits, a claim at least 10 times greater than the estimated costs, and a liquidated demand.
Proceedings to vindicate a principle, actions for injunctions or specific performance, and claims for declarations are likely to prompt wishes of good luck rather than cheques. The bottom line is that funders will only take up meritorious claims by motivated claimants against solvent defendants. You need to be in it for the money as well.
Third, it follows that you need to package your case attractively. Funders will run extensive due diligence. Make sure you have good lawyers on hand from the beginning. Ensure you have complete data. Funders will require the key documents and evidence, solid legal opinions, information on Party A’s finances, and a detailed budget.
Fourth, be smart. Consider signing a non-disclosure agreement (NDA) when you start talking to funders to preserve confidentiality and privilege. But do not rush into an exclusivity agreement. It is like marriage: take your time to assess the range of potential partners.
Fifth, remember that your funding agreement is a commercial contract. Do not allow your funder to become Party B. Ensure, for example, that the agreement specifies what happens when you decide that you are ready to settle – perhaps, curiously, you may decide Party A is not as bad as you thought, and decide to preserve the relationship – whereas the funder sees the potential for a fatter recovery if you persist. You need to have agreed how to resolve differences of approach.
Third party funding under the revised Arbitration Ordinance is potentially a win-win for all stakeholders (except the smug respondent). Claimants get access to justice, lawyers stop worrying about cash flow, and funders get their slice. The legislation should come into force later this year. Party A should be on guard.
仲裁资金提供：有人愿为你的法律费用买单
裁比诉讼更快、更具成本效益。而且没有人喜欢支付法律费用。
但是，生活有时却很奇怪。以仲裁为例，也许上面这些老生常谈已经不再可靠了：现在大众普遍认为仲裁至少与诉讼一样昂贵，耗时同样久。或许更令人惊讶的是，现在竟然有人愿意为你的律师费买单。
假设你对另一方（甲方）有一项合理的申索，必须通过仲裁解决。甲方不讲道德原则但腰缠万贯，只要他愿意，他可以支付你的索赔金额。他的资产位于一个容易强制执行仲裁裁决的地方，不过他却知道一件你不希望他知道的事：他之前对你所做的事令你无法再负担得起一项有争议性的仲裁案的法律费用。
因此，甲方可以拒绝支付你的索赔。他知道你没有足够的经济能力去追讨他，他也不在乎他的名声，他甚至没有动力为了以折价数额和解而进行谈判。简而言之，甲方手握所有的王牌。
在某些国家，你的财务问题也许能通过国家资助的法律援助来解决，但这很少适用于商业纠纷。同样地，许多地方禁止律师按判决金额收费，而以胜诉金额的一部分作为交换来要求无利害关系的第三方支付你的法律费用也可能是违法的。
然而，最近有一好消息。鉴于香港最近对《仲裁条例》作出的修订，法律现在已允许就在香港发生或进行的仲裁案件向第三方获取经济资助，而第三方则收取仲裁裁决所得的一部分金额作为回报。
当然，世上没有免费的午餐。所谓的“第三方出资者”通常会获得约30%的胜诉金额，但当你知道自身的权利得到了维护，并且有人替你支付你的法律费用，你可能会较为安心。而且，即使你出乎意料地输了，出资者也将会支付甲方的费用。
第三方资助对资金有限的申索人可能极具吸引力。其实，这对富裕的申索人可能同样适用。例如，他们可能会认为如果第三方资助可以使他们赢得仲裁并且获得大部分的裁决利益，那么出资者的抽成是可以接受的。他们可以用别人的钱来申索权益，把自己的钱花在更有利可图的事情上。
读到这里，如果你已经开始考虑采用第三方资助的做法，那么请注意下列事项。
首先，请进行尽职调查。切勿仅仅寻求最优价格，申索人要有意识地选择潜在的第三方出资者。例如，第三方出资者需要有足够的财力以协助你完成整个申索过程。虽然根据《行为守则（草案）》（尚未定案），第三方出资者必须具备充足的资产以确保其履行为期至少36个月的责任，但在香港，可以成为潜在第三方出资者的类别广泛，成熟的国际第三方出资者的财务风险可能较低，但规模较小的第三方出资者或市场新参与者仍需要经过仔细审查。
其次，问问自己，你的案件是否如你认为的一样具有说服力。你与甲方的争辩已持续了一段时间，你完全清楚案件的事实和细节。但是，不要将第三方出资者误认为慈善机构。他们是精明冷静的投资者，资助你的案件是为了赚钱。在决定是否出资之前，他们会仔细谨慎地研究你的案件。不同出资者的投资标准往往有所不同，但他们通常都要求案件有充分的理据，申索额至少要比预计的成本高出十倍，还有已确定的申索金额等等。
一宗证明原则的诉讼、一项禁令或强制履行令的申请以及一项要求声明的申索并不能让申请人获得实实在在的资金。出资者的底线是，他们只会接受由动机充分的申索人对有偿债能力的被告人提出的理据充足的申索。所以，你也需要从金钱的角度出发来处理你的案件。
第三，由上述内容可见，你需要把你的案件包装得具有吸引力。出资者会进行广泛的尽职调查，所以你必须从案件初始就雇用好的律师，同时确保你拥有完整的数据资料。出资者将会要求提供关键文档和证据、坚实的法律意见、甲方财务状况的相关信息以及详细的财务预算。
第四，要精明行事。当你开始与第三方出资者洽谈，便应考虑签署保密协议以维护资料的保密性和特权，但请勿仓促地签署独家协议。这情况就好比婚姻——你需要花点时间来评估各类的潜在合作伙伴。
第五，谨记你的资助协议是一份商业合同，不要允许你的出资者成为乙方。比方说，请确保资助协议中列明当你决定与甲方和解时该怎么办。说不定日后你会发现甲方并不像你曾经想象的那么糟，所以你决定维护你们之间的关系。然而出资者也有可能认为如果你坚持申索将会获得更丰厚的赔偿，你们需要事先商定如何处理可能发生的意见分歧。
根据修订后的《仲裁条例》，第三方资助对于所有利益相关方都可提供一个共赢的机会（除了自以为是的被告人）。申索人能获得公正，律师无需再为现金流担忧，而第三方出资者则能获得部分的判决赔偿金。这项立法将在今年晚些时候正式生效，甲方应当提高警惕了。
