MALAYSIA Law and Practice Contributed by: Dhinesh Bhaskaran, Rabindra Nathan, Shanti Mogan and Lai Wai Fong, Shearn Delamore & Co
2. Litigation Funding 2.1 Third-Party Litigation Funding Litigation funding is not permitted due to the operation of the common law doctrines of main- tenance and champerty. The common law con- demns maintenance and champerty for fear that a funder might be tempted to interfere with the course of justice for personal gain. 2.2 Third-Party Funding: Lawsuits The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia. 2.3 Third-Party Funding for Plaintiff and Defendant The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia. 2.4 Minimum and Maximum Amounts of Third-Party Funding The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia. 2.5 Types of Costs Considered Under Third-Party Funding The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia. 2.6 Contingency Fees Contingency fees are not permitted in Malaysia. Section 112(1)(b) of the Legal Profession Act 1976 states that no advocate and solicitor shall enter into any agreement to prosecute any suit or action which stipulates or contemplates pay- ment only in the event of success. As such, contingency fee agreements are void and unenforceable. See Lee Mun Keong v Pre- cise Avenue (M) Sdn Bhd & Anor [2014] 8 CLJ 74.
2.7 Time Limit for Obtaining Third-Party Funding The matter is not applicable in this jurisdiction as litigation funding is not permitted in Malaysia.
3. Initiating a Lawsuit 3.1 Rules on Pre-action Conduct
The court does not impose rules on the parties in relation to pre-action conduct, and generally there are no preconditions to initiating proceed- ings. There are on occasion statutory prerequi- sites to be complied with, such as issuing statu- tory notices before commencing proceedings to wind up a company based on its inability to pay its debts, bankruptcy proceedings against an individual and proceedings for leave to com- mence a derivative action. While there is no requirement for a potential defendant to respond to pre-action letters, in commercial matters the court may treat silence as an acceptance of the allegations since com- mercial entities and individuals are expected to refute untrue allegations. See Dream Property Sdn Bhd v Atlas Housing Sdn Bhd [2015] 2 CLJ 453. 3.2 Statutes of Limitations The Limitation Act 1953 prescribes the following limitation periods: • six years from the date of the breach or act for actions in contract and tort (Section 6(1) (a)); • where the action is based on fraud, conceal- ment of fraud or mistake, time starts to run from the date of discovery of the fraud or mis- take (Section 29(1)); • 12 years to enforce a judgment from the date it became enforceable (Section 6(3));
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