Arbitration Funding & Fee Arrangements | Global Overview 

Global Overview of Arbitration Funding and Fee Arrangements

This reference page* summarises the status of Conditional Fee Agreements (CFAs), Alternative Fee Arrangements (AFAs), and Third-Party Funding (TPF) with regard to Arbitration funding across multiple jurisdictions.

It provides a concise comparison of each jurisdiction’s position and commentary on how these mechanisms are applied in arbitration and litigation contexts.

The information below has been adapted from the second edition of the Delos Report.

*Please note that the information presented in this reference page does not constitute legal advice and the contributing law firms and Delos Dispute Resolution decline any and all responsibility. Time-limitation can be a highly technical subject, with multiple exceptions and variations, and you should accordingly consider seeking legal advice. 

Algeria (by Bennani & Associés)

Validity of CFAs/AFAs and TPF: Probably yes.

Commentary on CFAs and AFAs: Contingency fee arrangements and third-party funding are possible under Algerian law.

Angola (by Miranda & Associados)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – uncertain.

Commentary on CFAs and AFAs: The Angolan Bar Association forbids the use of contingency fee arrangements where the attorney’s remuneration is dependent on the outcome of the case.

Commentary on third-party funding: Third-party funding is not regulated under Angolan law and there are no specific restrictions to its use.

Argentina (by Bomchil)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: According to the local bar rules, lawyers may agree on contingency fees for up to 30% of the awarded amount (see, for instance, Article 6 of Law No. 27,423).

Commentary on third-party funding: Third-party funding is not regulated, although not banned, the practice is quite infrequent.

Australia (by Squire Patton Boggs)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Alternative fee arrangements – yes. Conditional fee arrangements – yes. Third-party funding – probably yes.

Commentary on CFAs and AFAs: In general, lawyers are prohibited by their professional standards regulations from entering into arrangements with clients that provide for contingency fees. In general, lawyers are permitted to enter into alternative fee arrangements. Any alternative fee arrangement must charge costs “that are no more than fair and reasonable in all the circumstances”. There are also restrictions on conditional fee arrangements that provide for an uplift fee on the occurrence of an event.

Commentary on third-party funding: Third-party funding, particularly for class actions and representative proceedings, is now a common and accepted part of the Australian legal landscape. There is not likely to be any restriction on third-party funding for domestic or international commercial arbitrations, except perhaps in rare and exceptional circumstances amounting to an abuse of process.

Austria (by Knoetzl)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Alternative fee arrangements – yes. Third-party funding – probably yes.

Commentary on CFAs and AFAs: While attorneys, in general, are free to agree on their remuneration, there are a few limitations under the Austrian Civil Code and the Code of Professional Conduct for Lawyers. Pure contingency fees and pactum de quota litis arrangements are prohibited and unenforceable. In addition, agreeing on an unreasonably high remuneration is not allowed. The assessment is conducted on a case-by-case basis. In case the remuneration is unreasonably high, Austrian attorneys may be liable under their disciplinary rules. Despite the prohibition of pacta de quota litis, lawyers are allowed to agree on alternative fee arrangements stipulating success fees.

Commentary on third-party funding: Third-party funding is not covered by a specific legal or regulatory framework. Nevertheless, third-party funding is generally considered permissible under Austrian law and is widely practiced. While there is a discussion as to whether the prohibition of pacta de quota litis extends to third-party funders, the prevailing opinion is that this is not generally the case. The Austrian Supreme Court has so far not decided on this issue. Depending on the circumstances of the case, the relationship between the attorney and a third-party funder may be qualified as contrary to the prohibition of contingency fees and pacta de quota litis arrangements.

Belgium (by Fieldfisher)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Alternative fee arrangements – yes. Third-party funding – yes.

Commentary on CFAs and AFAs: Lawyers may not charge contingency fees. Success fees are however permitted.

Commentary on third-party funding: Third-party funding is allowed, but not common.

Benin (by Ọya)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Under the Beninese Bar rules, contingency fee arrangements are partly permitted, provided they relate only to part of counsel’s remuneration.

Commentary on third-party funding: There are no specific legal provisions governing third-party funding in ad hoc and institutional arbitration.

Brazil (by TozziniFreire Advogados)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: The Brazilian Arbitration Act is silent on agreements regarding contingency fees and third-party funding, and there is no restriction regarding these topics.

Bulgaria (by Kambourov & Partners)

Validity of CFAs/AFAs and TPF: Contingency or alternative fee arrangements – yes. Third-party funding – probably yes.

Commentary on CFAs and AFAs: There are no restrictions to contingency or alternative fee arrangements, and in fact these are often used in practice.

Commentary on third-party funding: Third party funding is not contradictory to the local law, but is not very common in practice yet – there have been very few reported cases involving third party funding.

Canada (by Borden Ladner Gervais (BLG))

Validity of CFAs/AFAs and TPF: Yes.

Commentary on CFAs and AFAs: Contingency fee arrangements have long been accepted.

Commentary on third-party funding: Third-party funding is widely used but the jurisprudence on its acceptability is limited.

China (Mainland) (by Herbert Smith Freehills)

Validity of CFAs/AFAs and TPF: Contingency or alternative fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Generally, there is no restriction on lawyers entering into conditional fee arrangements, or pure contingency fee arrangements, or a combination of both with limited exceptions. Where contingency fees are allowed, the party and its legal advisor are required to enter into a contingency fee agreement, setting out the allocation of risks and responsibilities, and method and amount/rate of the charges. Contingency fees are not permitted to exceed 18% of the amount in dispute. Note that the restriction only applies to Chinese lawyers; foreign lawyers are subject to the codes of conduct and regulations applicable to them.

Commentary on third-party funding: Depending on the specific circumstance of the case, PRC courts’ view may differ in respect of the legitimacy or validity of third-party funding agreements in legal proceedings.

Côte d’Ivoire (by Dogue - Abbé Yao & Associés)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: None of the provisions of the Uniform Act on Arbitration Law or Ivorian law deals with the issue of contingency fee arrangement in arbitration, but it is forbidden for judicial trials.

Commentary on third-party funding: Regarding third-party funding, there is no provision related to it. Due to the impecuniosity of many parties involved in arbitration proceeding, third party funding could be increasingly used in Côte d’Ivoire.

Cyprus (by Christos Georgiades & Associates)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – uncertain. Third-party funding – probably yes.

Commentary on CFAs and AFAs: There is no statutory prohibition against contingency fee arrangements. Professional conduct rules of the Cyprus Bar Association do not allow for an advocate’s fee to be dependent on the outcome of the case to any extent. Therefore, contingency fee arrangements are not permitted for members of the Cyprus Bar Association.

Commentary on third-party funding: There is no statutory prohibition against third-party funding. Third party funding is not regulated. At present, it appears that it can be done in relation to arbitrations seated in Cyprus.

Dominican Republic (by Jimenez Peña)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Contingency fees are allowed and occasionally agreed upon between clients and lawyers.

Commentary on third-party funding: There is no express provision in the law prohibiting third-party funding for international arbitration claims. According to the Code of Ethics for Dominican Attorneys, counsel shall not gain monetary interest from a case they are handling other than the legal fees agreed upon with the client. However, there is no specific sanction provided in the Code for counsel who fund claims. In fact, in certain matters, such as labour claims, the worker’s counsel tends to advance the expenses on behalf of their client.

Egypt (by Zulficar & Partners)

Validity of CFAs/AFAs and TPF: Contingency or alternative fee arrangements – probably yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: The Arbitration Act does not include provisions relevant to contingency fees. However, Egyptian Advocacy Law No. 17 of 1983 allows lawyers to receive contingency fees, and therefore allows them to enter into alternative fee arrangements, in a margin of 5% to 20% of the outcome of the case. However, the 5% minimum was declared unconstitutional by the Supreme Constitutional Court, and so there is no minimum threshold as a matter of Egyptian law. Alternative fee arrangements between client and counsel cannot be based on the client’s solvency as ruled out by the Supreme Constitutional Court.

Commentary on third-party funding: The Arbitration Act is silent on the issue of third-party funding. Albeit the absence of significant case law on the matter, this does not preclude, per se, arbitration tribunals from embracing this increasingly important practice.

England & Wales (UK) (by White & Case)

Validity of CFAs/AFAs and TPF: Yes.

Commentary on CFAs and AFAs: Conditional fee arrangements (“CFAs”) and Damages-based agreements (“DBAs”) are generally permitted in England. Both CFAs and DBAs must however comply with statutory requirements governing such fee arrangements.

Commentary on third-party funding: Third party funding is also generally available and there is an increasing awareness of this funding option.

Ethiopia (by Aman Assefa & Associates)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – probably yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: There are no legal restrictions. However, such alternative funding mechanisms, with the exception of contingency fee arrangements, are not widely known or practised in Ethiopia.

Finland (by Castrén & Snellman)

Validity of CFAs/AFAs and TPF: Contingency or alternative fee arrangements – yes. Third-party funding – yes.

Commentary on CFAs and AFAs: A party and its counsel may agree on contingency fees and other alternative fee arrangements.

Commentary on third-party funding: A party may acquire external funding for an arbitration from third parties, including third-party funders, insurance companies, banks, etc. Special third-party funding companies are not very active in the Finnish market, but it is quite common for Finnish parties to have insurance that covers the costs of disputes up to an agreed amount.

France (by August Debouzy)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – probably yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Under French ethic rules applicable to French lawyers, fee arrangements solely based on success fees are prohibited (the so-called “quota litis pacts”). However, the Paris Court of Appeal held that such contingency fee arrangements are valid in the context of an international arbitration, as they are not contrary to the French definition of international public policy.

Commentary on third-party funding: Third-party funding is not prohibited under French law and it has recently gained importance in France. However, there are no specific legal provisions or case law regarding this issue.

The Gambia (by Farage Andrews Law Practice)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: No restrictions noted.

Germany (by CMS Hasche Sigle)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – probably yes.

Commentary on CFAs and AFAs: German lawyers may only enter into contingency fee agreements under very limited conditions.

Commentary on third-party funding: Third party funding is not codified in German arbitration law, but it is accepted and increasingly used.

Greece (by KLC Law Firm)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – probably yes.

Commentary on CFAs and AFAs: Greek law recognises and regulates, to a certain extent, lawyer funding schemes in the form of contingency fee agreements. However, only contingency fees of up to 20% (or 30% if more than one lawyers are handling the case) fees are permitted. A contingency fee agreement is valid only when the lawyer undertakes to provide his/her services up to the final adjudication of the case, without receiving any remuneration if he/she fails to do so (even if the latter takes place through compromise).

Commentary on third-party funding: Third-party funding, while uncommon in Greek arbitral practice, is not prohibited. In the absence of a regulatory framework and any publicly available precedent, any party is free to conclude a relevant agreement with a third party, on the basis of the general principle of freedom of contract or could resort by analogy to the existing regulation regarding contingency fee agreements in litigation.

Guinea (by Thiam & Associés)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: No restrictions noted.

Hong Kong (by Fangda Partners)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – yes.

Commentary on CFAs and AFAs: Outcome-Related Fee Structures have been available in Hong Kong since 16 December 2022 for arbitration and arbitration related proceedings, allowing for not only Conditional Fee Arrangements, but also for Damages Based Arrangements and for hybrid Damages Based Arrangements.

Commentary on third-party funding: Third party funding is expressly permitted for arbitration including proceedings before emergency arbitrators and ancillary court proceedings.

India (by Trilegal)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – probably yes.

Commentary on CFAs and AFAs: The Bar Council of India does not permit advocates to charge their clients fees that are either subject to the outcome of a litigation or are a percentage or share of the awarded claims by the court.

Commentary on third-party funding: There is no separate law governing third-party funding in India but in general there is no embargo against it.

Indonesia (by KarimSyah Law Firm)

Validity of CFAs/AFAs and TPF: Yes.

Commentary on CFAs and AFAs: Indonesian law does not restrict the freedom of parties to either agree with their counsel as to the quantum or method of payment of their fees, nor whether they may utilise external/third-party funding.

Iran (by Gheidi & Associates)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: No restrictions noted.

Iraq (by Eversheds Sutherland)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – probably yes.

Commentary on CFAs and AFAs: Contingency fee arrangements are not prohibited.

Commentary on third-party funding: There are no laws or regulations prohibiting third-party funding. Although there are no precedents on this issue yet, there are no particular reasons to suggest that such agreements would not be enforceable.

Italy (by Legance)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Alternative fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: As a rule, contingency fees are not permissible. Attorneys can accept a remuneration based on a percentage of the value of the case, but it may not vary in relation to the outcome of the case (Code of Ethics, Art. 25).

Commentary on third-party funding: Concerning third-party funding, the practice is not prohibited by Italian law. However, to the best of our knowledge there are no judicial cases defining the limits of third-party funding in Italy.

Kenya (by ALN Kenya - Anjarwalla & Khanna)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: There are restrictions against contingency fee arrangements (Section 46(c) of the Advocates Act (Chapter 16, Laws of Kenya).

Commentary on third-party funding: There are no statutory restrictions against third-party funding. However, it is worth noting that Section 46(a) of the Advocates Act prohibits an agreement allowing an advocate to purchase any part of the client’s interest in a suit.

Korea (by Yulchon LLC)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Contingent fees are a widespread practice in Korea especially for commercial litigation and arbitration.

Commentary on third-party funding: Third-party funding is neither expressly prohibited nor expressly permitted.

Lebanon (by Obeid Law Firm)

Validity of CFAs/AFAs and TPF: Yes.

Commentary on CFAs and AFAs: The Lebanese Legal Profession Act provides that legal fees are determined by an agreement concluded between the lawyer and the client. The Act does not restrict the nature of the agreement which remains subject to the parties’ contractual free will.

Commentary on third-party funding: Insofar as a third-party funding is concerned, a careful structure is required to ensure that such arrangements would not fall under the prohibition of excessive riba under Lebanese law.

Libya (by MKE Lawyers)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – probably yes.

Commentary on CFAs and AFAs: Contingency fees are common.

Commentary on third-party funding: Third party funding arrangements not clear but may be possible.

Mauritius (by Peeroo Chambers)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: No restrictions noted.

Mexico (by Von Wobeser)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: No restrictions noted.

Morocco (by Gide Loyrette Nouel)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – probably no. Third-party funding – uncertain.

Commentary on CFAs and AFAs: There is no provision in the Code relating to contingency or alternative fee arrangements or third-party funding. However, Moroccan lawyers are prohibited from fixing fees according to the result to be achieved.

New Zealand (by Chapman Tripp)

Validity of CFAs/AFAs and TPF: Third-party funding – probably yes.

Commentary on third-party funding: There are no statutory restrictions on third-party funding. Arbitral tribunals are generally not concerned with the sources of litigation funding. Art 17, Sch 1 affords the tribunal the power to grant an order for security for costs as an interim measure. In court proceedings, however, courts may impose disclosure requirements in non-representative cases, such as disclosure of the identity of the funder, its amenability to the jurisdiction of the New Zealand courts, and details of its financial standing.

Nigeria (by Broderick Bozimo & Company)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: The Rules of Professional Conduct for Legal Practitioners (the “RPC”) allows contingent fee agreements. Whilst the RPC precludes a lawyer from entering into an agreement to pay for or bear the expenses of his or her client’s litigation, the lawyer may, in good faith, advance expenses as a matter of convenience and subject to reimbursement.

Commentary on third-party funding: Funding agreements that include the provision of funding an arbitration in return for a proportion of any recoveries are potentially, although not necessarily, champertous.

Norway (by Wikborg Rein)

Validity of CFAs/AFAs and TPF: Conditional fee arrangements – yes. Contingency fee arrangements – yes. Third-party funding – yes.

Commentary on CFAs and AFAs: Conditional fees are permitted. Contingency fees for attorneys are permitted only to a limited extent. The Code of Ethics for Lawyers contains a general prohibition against percentage share fees; a fee based on a share of the outcome or subject matter of the action is not permitted, while non-excessive success fees are accepted.

Commentary on third-party funding: Third-party funding is accepted, but it will not extend the scope of legal costs to be awarded.

Pakistan (by Raja Mohammed Akram & Co. (RMA&CO))

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – yes.

Commentary on CFAs and AFAs: Contingency fee arrangements are not permitted in Pakistan under the ‘Canons of Professional Conduct and Etiquette of Advocates’.

Commentary on third-party funding: Third party funding is not per se illegal and permitted where the funding arrangement is not against public policy or extortionate and does not lead to vexatious litigation.

The Philippines (by SyCip Salazar Hernandez & Gatmaitan)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: No restrictions noted.

Poland (by Clifford Chance)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – uncertain.

Commentary on CFAs and AFAs: The rules of ethics of Polish advocates and legal advisers state that their remuneration cannot be based solely on a contingency fee.

Commentary on third-party funding: There are no legal provisions regulating the issue of third-party funding, although it is becoming more common in Poland.

Portugal (by Morais Leitão, Galvão Teles, Soares da Silva & Associados (MLGTS))

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – uncertain.

Commentary on CFAs and AFAs: The Code of Ethics of the Portuguese Bar Association expressly prohibits the use of contingency fee arrangements according to which the right to lawyer’s fees is dependent on the success of the claim.

Commentary on third-party funding: Third-party funding is not specifically regulated and there are no particular restrictions to its use.

Romania (by Iordache Partners)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – probably yes.

Commentary on CFAs and AFAs: Under Romanian law, lawyers are not allowed to conclude pure “quota litis agreements”, but contingency arrangements (known as “success fees”) are allowed to supplement regular fees.

Commentary on third-party funding: Third party funding is not regulated in Romania; therefore, such funding arrangement may be possible, but the legal structure of the arrangements should be examined from case to case for compliance with the local law.

Russia (by Freshfields Bruckhaus Deringer and Stonebridge Legal)

Validity of CFAs/AFAs and TPF: Uncertain.

Commentary on CFAs and AFAs: Contingency fees of lawyers are not expressly prohibited as a matter of law, but courts have held such fee arrangements to be unenforceable.

Commentary on third-party funding: Assignment of the rights and obligations and therefore of the legal interest in claims is widespread, but third-party funding without the assignment is a relatively new phenomenon for the Russian market, which is not expressly regulated, nor prohibited by law.

Rwanda (by Freshfields K-Solutions & Partners)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Fees based on results, also known as a quota litis pact are illegal under Art 2 (1) (c) of the Rwandan Bar Association Regulation No 01/2014.

Commentary on third-party funding: There is no regulation on third party funding in Rwanda.

Singapore (by Shearman & Sterling)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Conditional fee arrangements – yes. Third-party funding – yes.

Commentary on CFAs and AFAs: Contingency fee (i.e., damages-based) arrangements are prohibited. However, conditional fee arrangements are expressly permitted following the 2022 amendments to the Legal Profession Act 1966.

Commentary on third-party funding: Third-party funding in Singapore-seated arbitrations and related court proceedings is also allowed. From 2021, third-party funding in domestic arbitrations and related court proceedings are also allowed.

Spain (by Garrigues)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: No restrictions regarding contingency fee arrangements exist. Contingency and success fees were historically banned, but were recently accepted as a pro-competitive measure.

Commentary on third-party funding: The Arbitration Act does not regulate third-party funding. Although in practice this type of funding is being used (particularly after the prohibition of contingency fees was lifted), there is still scope for improvement and development.

Sri Lanka (by FJ&G de Saram)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Contingency fee agreements are expressly prohibited under the Code of Ethics for lawyers.

Commentary on third-party funding: There are no legal provisions dealing with third-party funding or the sharing of risk. There have also been no reported cases on this.

Switzerland (by Lévy Kaufmann-Kohler)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Alternative fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Under Article 12(1)(e) of the Swiss Federal Lawyers’ Act, Swiss attorneys cannot enter into a prior agreement with their clients providing for a contingency fee based entirely on the outcome of the case (pactum de quota litis); nor can they agree to waive legal fees in the event of an unfavourable outcome. A fee arrangement containing elements of a contingency fee (pactum de palmario) is allowed under certain conditions.

Commentary on third-party funding: Swiss law does not prohibit third party funding.

Taiwan (by Formosa Transnational)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – yes.

Commentary on CFAs and AFAs: There is no restriction against contingency legal fee arrangements for arbitration (family and criminal matters, which do not allow contingency fee arrangements, are not arbitrable).

Commentary on third-party funding: Third-party funding is permitted only if the funded client agrees thereto and such funding does not affect the impartial professional evaluation of the attorney under Article 30-2 of the Rules of Professional Attorney Ethics.

United Arab Emirates (UAE) (by Al Tamimi & Co.)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – no. Third-party funding – uncertain.

Commentary on CFAs and AFAs: Contingency fee arrangements are prohibited in the UAE.

Commentary on third-party funding: UAE law does not expressly prohibit third-party funding in general.

United States of America (USA) (by Arent Fox (California), Boies Schiller Flexner (Florida, New York, Washington D.C.), and Vinson & Elkins (Texas))

Validity of CFAs/AFAs and TPF: Each U.S. state separately governs the terms and legality of funding arrangements. Each state has attorney ethical and possibly other rules (e.g., champerty) that should be consulted.

Washington D.C. (by Boies Schiller Flexner)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: D.C.’s ethics rules impose certain restrictions on contingency or alternative fee arrangements.

Commentary on third-party funding: In 2020, the D.C. Bar asked for comment on possible revisions to D.C.’s ethics rule which would loosen restrictions on fee-sharing with non-lawyers which in other jurisdictions has been interpreted to restrict lawyers from directly engaging in certain third-party funding arrangements.

New York (by Boies Schiller Flexner)

Validity of CFAs/AFAs and TPF: Contingency fee arrangements – yes. Third-party funding – uncertain.

Commentary on CFAs and AFAs: New York ethics rules impose certain restrictions on contingency or alternative fee arrangements.

Commentary on third-party funding: In 2018, the New York City Bar Association (NYCBA) issued a formal opinion which interpreted New York’s Rules of Professional Conduct’s fee-sharing prohibition as forbidding a lawyer from entering into arrangements with third-party litigation funders where the payments to the lawyer were contingent on the fees received. This opinion was heavily criticized, and in 2020 the NYCBA’s Working Group on Litigation Funding issued a report recognizing the benefit of litigation funding and proposing revisions to the applicable rules. The report also addressed arbitration funding specifically and recommended that changes be made to require the disclosure in arbitration of the fact of litigation funding and identity of litigation funders.

Florida (by Boies Schiller Flexner)

Validity of CFAs/AFAs and TPF: Yes.

Commentary on CFAs and AFAs: While the law does not directly bar the use of contingency fees, alternative fee arrangements, or third-party funding for arbitrations, the ethical rules in Florida impose certain restrictions.