News Singapore

Two Bills passed to set a Framework for third-party funding in Singapore

 

Singapore Parliament has passed two bills on Tuesday (Jan 10) – the Civil Law Amendment Bill and the Mediation Bill – which aim to support Singapore’s position as a dispute resolution hub.

Now the question is, what would these bills do?

The Civil Law Amendment Bill allows third-party funding to finance international commercial arbitration and via the Mediation Bill government has beefed up enforcement of mediated settlements to support international commercial mediation.

The new Mediation Act, aimed at making settlements more enforceable, will allow parties who reach a settlement after mediation to agree to apply to have the settlement recorded as a court order, which can be enforced. It also stipulates that mediation communication cannot be disclosed to any third party, and cannot be admitted into evidence without permission as well.

Previously, there was no framework for third-party funding in Singapore. The law prevented parties which had no interest in arbitration proceedings from giving assistance. But now with the Civil Law Amendment Bill, third-party funding is a feature in leading arbitration centers such as London, Paris, and Geneva. Singapore now joins those cities, and the Law Ministry said the move will strengthen the country’s position as a key arbitration seat globally.

Maxwell Chambers, which houses the Singapore International Arbitration Centre, will be enlarged to allow greater scope for settling disputes.

In Parliament on Tuesday, Senior Minister of State for Law Indranee Rajah said that there needs to be an alternative method so that those seeking resolution may find a method most suited for them. She also added that the Bill provides an “additional, expedited way” for parties to ensure their dispute settlement is enforceable.

She further added that agreements for third-party funding of dispute resolution proceedings here are now “unenforceable”, to protect vulnerable parties and guard against potential abuse of court proceedings.

MP (West Coast GRC) Patrick Tay proposed a continual appraisal of accredited mediators, saying that mediation needs to evolve quickly into a true profession. He went on to add,

High minimum practice and ethical standards need to be set, made transparent and achieved internationally. Mediators, too, need to be suitably recognized for their expertise and skills.

Member of Parliament (MP) for Bukit Batok Murali Pillai was quoted saying,

Third-party funding allows commercial funders to enable the funded party to litigate what the funder perceives to be a legitimate case. In this manner, third-party funders’ funding facilitates access to justice by enabling parties who may not have sufficient financial means to prosecute their genuine disputes to do so.

 

The court may, however, refuse to record a settlement agreement if it is contrary to public policy. The Mediation Bill will not apply to mediation conducted under the Industrial Relations Act, those conducted by the Family Justice Court under the Women’s Charter, or those conducted under the Small Claims Tribunal framework. These rules are to prevent inconsistency with existing rules guiding all the other types of mediation.

 

 


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