BAHRAIN Law and Practice Contributed by: Noor Al Rayes, Fatema Sarhan, Bradley Price and Raghad Al Matrook, Al Tamimi & Company
Courts may encourage or refer parties to mediation where both consent and financial incentives, such as waiver of court fees, promote early settlement. Institutions such as the BCDR demonstrate Bah- rain’s commitment to developing ADR domestically and internationally. ADR is gaining wider acceptance, supported by both the legal framework and a general preference for amicable resolution.
priety. Enforcement relies on general contract and commercial law principles. Permissibility In principle, third-party funding is permissible pro- vided it does not contravene law, public order, or pro- fessional conduct. Its use remains limited, typically arising in international arbitration or high-value cross- border disputes. Disclosure in Arbitration The BCDR Arbitration Rules 2022 represent a signifi- cant institutional development. Article 21-bis requires any party to disclose the existence of third-party fund- ing obtained at any time prior to or during arbitration proceedings, including the identity of the funder. This enables arbitrators to assess potential conflicts of interest and allows the tribunal to consider the impact of funding arrangements on cost allocation. Court Litigation In court litigation, there is no disclosure requirement, and courts do not routinely order disclosure of funding arrangements. 5.3 Contingency Fee Arrangement Contingency fee arrangements are restricted under the Legal Profession Law. 5.4 Insurance Insurance coverage is broadly available in Bahrain, regulated by the Central Bank of Bahrain. Dispute- related coverage is generally included in policies cov- ering legal liabilities and costs of defending or pursu- ing claims. • In construction, engineering, and real estate, contractor’s all risk, employer’s liability, and profes- sional indemnity policies are typically relevant. • Dedicated litigation insurance products, such as before-the-event or after-the-event insurance, common in some common law jurisdictions, are less prevalent in Bahrain. • In arbitration, insurance may cover adverse costs, sometimes combined with third-party funding.
5. Costs, Fees and Funding 5.1 Legal Fees
Legal fees are generally agreed contractually between lawyer and client. There is no statutory tariff, and fees vary based on the lawyer’s reputation, expertise and case complexity. Lawyers may charge on various bases:
• hourly rates; • fixed fees; or • retainer arrangements.
Fees must be reasonable under professional and ethi- cal standards. A clear written fee agreement at the outset is advisable. Contingency Fee Arrangements Pure contingency arrangements, where the lawyer’s fee depends entirely on the outcome, are prohibited under the Legal Profession Law. Success-based ele- ments may be permissible alongside a base fee if the arrangement complies with professional standards. Courts retain authority to review and reduce fees found to be excessive, unreasonable or dispropor- tionate. 5.2 Third-Party Funding Regulatory Framework Bahraini law does not provide a dedicated statu- tory framework regulating third-party litigation fund- ing. Funding arrangements are largely contractual between claimants and funders. There is no explicit prohibition on funding, but courts and tribunals expect arrangements to be transparent and free from impro-
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