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Abu Dhabi Global Market Courts issue Litigation Funding RulesADGM Courts 16/04/2019
Courts establish a comprehensive framework for third party financing of proceedings in the Middle East and Africa
Abu Dhabi Global Market Courts (“ADGM Courts”), theinternationally recognised independent courts of ADGM, are pleased to issue their Litigation Funding Rules in response to the growing interest in third party funding of parties to manage their litigation and arbitration proceedings. These Rules, the first of such in the Middle East and Africa region, are designed to provide parties and funders with greater certainty in relation to the enforceability of funding arrangements in proceedings for resolving disputes. ADGM Courts are the first in the region to initiate and enact a comprehensive framework for third party funding. The new Rules have immediate effect.
Litigation funding enables litigants to obtain financing to cover all or part of their legal costs from a private commercial litigation funder who has no direct interest in the proceedings. If the litigant is successful, the funder receives a pre-agreed share of the outcome of the claim, usually a percentage of the amount recovered. If the litigant is unsuccessful, the litigant pays nothing to the funder and the funder loses its money.
ADGM Courts drafted the Rules after an extensive review of the litigation funding framework in other jurisdictions, including Australia, Singapore, Hong Kong, England and Wales and the United States. Prior to their enactment, ADGM Courts issued a public consultation paper to ensure that they received the views of all parties interested in this financing so that the rules could not only achieve their purpose of ensuring certainty regarding the enforceability of these arrangements, but also respond to the needs of litigants and the business interests of private organisations in this sector. ADGM Courts received positive comments on the draft framework from numerous key stakeholders, including lawyers, funders and potential litigants. This demonstrates that there is a strong interest in and support for clarity about third party funding in the region, in response to which these Rules are being issued.
The Right Honourable Lord David Hope of Craighead KT, Chief Justice of ADGM Courts, said:“Theissuing of our Courts’ Litigation Funding Rules signals our strong desire to strike a balance between litigants’ needs for financing of their proceedings to ensure access to justice, the legitimate commercial interests of Funders, and promoting transparency of the Funder’s role for the benefit of consumers of these resources. Litigation funding continues to grow across the world and has played a critical part in allowing the commencement of important actions in numerous jurisdictions. We aim to reflect and move with the changes that occur in international dispute resolution practice. These Rules are yet another example of how we respond to the expectations of business and the community as the highly regarded courts of a successful and dynamic international financial centre.”
The Rules provide for various matters, including: that the Funder’s principal business must be in funding proceedings to which the Funder is not a party; the Funder must have qualifying assets of not less than USD 5 million; the Litigation Funding Agreement must contain some minimum terms including to ensure there are no conflicts of interest; the Funder’s involvement in the settlement of proceedings; and the Funder’s obligations about dealings with lawyers.
For more details, please click on ADGM Courts Litigation Funding Rules.
About ADGM Courts:
ADGM Courts, the latest and most progressive judicial framework in the Middle East, are one of three world-class and independent authorities under ADGM supporting Abu Dhabi’s commitment to providing an innovative, efficient and dynamic business environment that fosters continuous economic growth. ADGM is the first jurisdiction in the Middle East that directly applies the well-established and internationally accepted principles of English common law.
Fully operational since May 2016, ADGM Courts are anchored by a judiciary of highly experienced and eminent judges from the world’s leading common law jurisdictions. ADGM Courts are made up of a Court of First instance and a Court of Appeal that handle civil and commercial disputes. With “innovation” as part of their DNA, ADGM Courts are “digital” by default and continue to transform the engagement and delivery of judicial and dispute resolution services via their e-platform.
As an integral member of Abu Dhabi’s judicial system, ADGM Courts continue to establish strategic relationships for local and international judicial cooperation to advocate and uphold the highest level of international practice. ADGM Courts’ collaborations include Abu Dhabi Judicial Department, the UAE Ministry of Justice, Ras Al Khaimah Courts, the Commercial Court, Queen’s Bench Division, England and Wales, the High Court of the Hong Kong Special Administrative Region of the People’s Republic Of China, the Supreme Court of New South Wales, the Federal Court of Australia, the Supreme Court of the Republic of Singapore. For more updates and information of ADGM Courts, please visit ADGM Courts page
About Abu Dhabi Global Market
Abu Dhabi Global Market (ADGM), an international financial centre (IFC) located in the capital city of the United Arab Emirates, opened for business on 21 October 2015. Established by a UAE Federal Decree as a broad-based financial centre, ADGM augments Abu Dhabi’s position as a global hub for business and finance and serves as a strategic link between the growing economies of the Middle East, Africa and South Asia and the rest of the world. ADGM’s strategy is anchored by Abu Dhabi’s key strengths including private banking, wealth management, asset management and financial innovation. Comprising three independent authorities: ADGM Courts, the Financial Services Regulatory Authority and the Registration Authority, ADGM as an IFC governs Al Maryah Island which is a designated financial free zone. It enables registered financial institutions, companies and entities to operate, innovate and succeed within an international regulatory framework based on Common Law.
Since its inception, ADGM has been awarded the “Financial Centre of the Year (MENA)” for three consecutive years for its initiatives and contributions to the financial and capital markets industry in the region.*
For more details of ADGM, please visit www.adgm.com or follow us on Twitter: @adglobalmarket and Linkedin: ADGM
* Source : The Global Investor Middle East and North Africa (MENA) Awards