Paolo Vargiu

Third Party Funding (TPF) is presented as a tool to help fund the cost of expensive litigation. In the context of Investment Arbitration, however, TPF has instead led to the commodification of justice, and raises concerns around its assetization. Arbitration often comes at a net loss for States, and the extraordinary expenditures required may pique the interest of third party funders who wish to profit from suing States. A two-fold movement contributed to the assetization process of TPF. The first movement was to package TPF as a tool to ensure access to justice, and the second was to assert a ‘funding gap’ in access to justice that ad hoc TPF alone could not address. TPF leads to more claims and riskier claims against States and increases the risk of crippling compensation. This requires States to allocate public funds to the cost of litigation, rather than to other necessary public services.