Arbitral tribunals typically allocate the costs of the arbitration at the conclusion of a case. The question has arisen as to whether the existence of third-party funding should affect the allocation of costs to the detriment of the funded claimant. Most – though not all – commercial and investment tribunals have typically held that the presence of a funder does not constitute, in and of itself, a sufficient basis to grant security for costs. However, it is accepted in both of these areas that the existence of an external funder may be a factor to be taken into consideration in deciding on a request for security for costs.
ASA Bulletin