| Summary: | This study focuses on third party funding, especially its application in commercial arbitration. Arbitration as an alternative dispute resolution mechanism is usually known for its celerity and flexibility. However, it entails high costs and expenses, making arbitration difficult to reach, particularly for those who have limited financial resources. In an attempt to lighten those costs and expenses it has been discussed the possibility of third party funding. TPF occurs when a third party decides to pay for a part or the total amount of costs that litigation requires of one of the litigants and in return the funder is entitled to a part of the success obtained by the financed party. Only if the party wins the dispute will the funder be rewarded. It’s already in force in some jurisdictions around the world that seem to understand it as a tool for an easier access to Justice. However, some jurisdictions still impose some restrictions driven by the medieval beliefs of mistrust of third party interventions in disputes. The precise definition of TPF is also a struggle because of its evolutionary state. In addition, its regulation is rare with only a few jurisdictions and arbitration centers expressly permitting its application. Notwithstanding its advantages in commercial arbitration it can also create some problems concerning the general principles applicable to the arbitral proceedings, having the ability to create conflicts of interest with the arbitrators and jeopardize the confidentiality that reigns in arbitration. In Portugal, TPF is not yet a reality nor there are known cases in which it was used. Nevertheless, there are advantages in its application in our country as long as it’s done with caution for the rules and principles in place. This thesis aims to understand if TPF is indeed a viable and fortunate way in commercial arbitration and if its disadvantages can be override specially through its regulation in order to guarantee that arbitration keeps its position as an efficient way of solving disputes.
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