Third-party funding in commercial arbitration in Canada has moved increasingly into the mainstream. Its implementation is largely influenced by the treatment of third-party funding in litigation, which is why it is important for arbitration practitioners in Canada to continue to follow jurisprudential trends regarding the treatment of third-party funding. A recent third-party litigation decision from Quebec provides valuable insight for arbitrators in this regard.
The Canadian courts have confirmed in a series of recent cases that third-party funding is permitted in Canada. Previously, in Canada's common law jurisdictions (ie, all provinces aside from Quebec), opportunities for third-party funding were constrained by the longstanding common law principles of maintenance and champerty. However, the law has evolved to permit third-party funding, subject to certain restrictions.
An Alberta court recently considered the complexities that can arise in multi-party disputes where arbitration clauses may not be included in all of the relevant agreements. The court balanced the issues of judicial efficiency with the need to respect parties' agreements (or absence thereof) to refer a dispute to arbitration under Alberta's International Commercial Arbitration Act.