Paris Bar Council indicates support for third-party funding

In a resolution adopted on 21 February 2017, the Paris Bar Council (Conseil de l'Ordre) indicated its support for third-party funding. The resolution confirms that third-party funding is in the interests of both clients and counsel, particularly in the context of international arbitration. It is also not prohibited by French law.

The resolution provides a helpful reminder of the issues which may arise in connection with third-party funding, noting that counsel representing a funded party continue to owe their ethical obligations solely to their client and may not advise the funder in any way. As such, any instructions must be given by the client alone, counsel cannot provide the funder with information on the case, and any meeting with the funder must take place in the presence of the client. Counsel must also encourage their clients to reveal the existence of funding to the tribunal, as well as alerting them to the risks associated with non-disclosure, notably regarding the possible annulment of any award and the potential obstacles to enforcement. Finally, the resolution also suggests that counsel encourage their clients to administer any funding arrangements through the CARPA (Caisse Autonome des Règlements Pécuniaires des Avocats), the obligatory system which lawyers are required to use for the receipt of client monies.

Unsurprisingly, the resolution, which was publicised during Paris Arbitration Week, has received a largely positive reaction from the Paris-based arbitration community.

Source: Résolution adoptée à la séance du Conseil de l’Ordre du 21 février 2017.

This update was first published by Practical Law.

For further information, contact Vincent Bouvard, Avocat, Peter Archer, Associate, or your usual Herbert Smith Freehills contact.