Funding of Claims in Investor-State Dispute Settlements: Could Third-Party Funding Enhance Access to Justice?

This chapter addresses the issue of funding of claims in investor-state dispute settlement (ISDS), aiming to investigate whether the mechanism of “third-party funding” (TPF) could facilitate access to justice for a potential claimant. After a preliminary assessment on the role of the individual in the context of international investment law, the chapter will focus on the possible identification and recognition of the right of access to justice in investment arbitration, notably through the indirect analysis of denial of justice and the relevance of bilateral investment treaty provisions. Once the main aspects of access to justice in ISDS have been addressed, the problematic nature of high costs in investment arbitration procedures will be discussed, which sometimes represents a real obstacle to access to justice, especially for small and medium-sized enterprises (SMEs). Against this background, the mechanism of TPF will be analyzed, first by defining the nature of the agreement underpinning it and then by looking at the potential legal implications might be. The overall conclusion reached is that, although TPF facilitates access to justice, there are several complexities that could make its use rather difficult in ISDS. The chapter ends with some recommendations to overcome the main obstacles.