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We’ve previously advised on the importance of a good case memorandum when applying for arbitration funding. Some law firms have admittedly been better than others in addressing all the likely requirements of funders and arbitration cost insurers, but it is clear that a lot of leading arbitration law firms are becoming more experienced in making applications to the market.

One aspect sometimes overlooked can be the enforcement strategy and consequential budget. All arbitration finance companies will have a checklist of key items they need to satisfy during their due diligence. Clearly, the merits phase is a crucial part but an award in the claimants’ favour will be of little comfort to an arbitration funder if it cannot be easily enforced. Whilst a convincing case can often be made that, over the course of time and with significant financial investment, most awards can be monetised, most arbitration funding providers are unlikely to have the appetite for a 5 to 10 year project. Pointing out issues such as this at the outset enables us to select funders which do have an appetite for a longer-term investment and also avoids the clients or lawyers having to have difficult conversations with the financiers further down the line.

Enforcement budgets and arbitration funding

It’s prudent to apply some time to identify how you will seek to enforce an award, if the respondent is not forthcoming in satisfying the same. While it can be a “catch 22” situation, advising “how long is a piece of string?” is not really what a provider of arbitration finance wants to hear when discussing the likely budget for any enforcement phase. There is normally a middle ground between complete speculation and an open budget, including allowing for “contingencies” at the outset, specifically for situations where the case does go over budget. Fortunately, our advisors can assist with the presentation, including providing template memorandums and template cash flow budgets, if necessary.