SINGAPORE Law and Practice Contributed by: Benedict Teo, Kelvin Tan, Kong Man Er and Shumin Lin, Drew & Napier LLC
Lawyers are obliged to disclose the existence of any funding arrangement and the identity of the funder to the relevant court or tribunal, and to every other party to the proceedings. Lawyers and law practices are prohibited from holding any financial or other interests in, or receiving com- missions, fees or shares of proceeds from, a funder they have introduced to their clients or that has fund- ing contracts with their clients. 2.2 Third-Party Funding: Lawsuits Third-party funding is allowed for arbitration and relat- ed court or mediation proceedings, proceedings com- menced in the SICC or appeal proceedings arising from any decision made in proceedings commenced in the SICC, for so long as such proceedings remain in the SICC, related mediation proceedings and certain insolvency matters. 2.3 Third-Party Funding for Plaintiff and Defendant Third-party funding is available to both claimants and defendants, although in practice funding is unlikely to be available or offered to defendants except where a substantial counterclaim is involved. 2.4 Minimum and Maximum Amounts of Third-Party Funding There is no minimum or maximum statutory limit on the amount of third-party funding. 2.5 Types of Costs Considered Under Third- Party Funding A third-party funder will consider funding solicitor- and-client costs, party-and-party costs and other costs incurred in the conduct of the matter. 2.6 Contingency Fees Conditional fee agreements may be made in respect of arbitration proceedings and certain SICC proceed- ings and related mediation and court proceedings. Such agreements may provide for all or part of the lawyers’ remuneration and costs, including any uplift in fees, to be payable only upon specified circum- stances or pre-agreed outcomes in the dispute. Pure contingency fee arrangements, whereby lawyers get
paid an agreed percentage of the sum or damages claimed, remain impermissible. 2.7 Time Limit for Obtaining Third-Party Funding There are no time limits for obtaining third-party fund- ing.
3. Initiating a Lawsuit 3.1 Rules on Pre-Action Conduct
Where both parties are represented by lawyers before proceedings start, the claimant’s lawyers must first enquire whether the defendant’s lawyers have instruc- tions to accept service on behalf of their client. If the defendant’s lawyers do not confirm that they have such instructions within three working days, the claim- ant’s lawyers can serve the originating process court papers on the defendant directly. Before starting an action, a prospective claimant should have a letter of demand sent to the prospec- tive defendant to give an opportunity for the claim to be acceded to and to potentially avoid litigation. Prior to commencement and during the course of any action or appeal, a party to any proceedings has the duty to consider amicable resolution of the dispute. A party is to make a written offer of amicable resolu- tion before commencing an action, unless there are reasonable grounds not to do so. A party to any pro- ceedings must not reject an offer of amicable resolu- tion unless the party has reasonable grounds to do so. The offer of amicable resolution must be open for acceptance for at least 14 days. The terms of an offer that has not been accepted must not be relied upon nor made known to the court until after the court has determined the merits of the action. There are pre-action protocols for medical negligence claims in the High Court and the State Courts, and for some categories of claims brought in the State Courts, such as personal injury, non-injury motor accident and defamation claims.
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