Singapore is set to allow no-win, no-fee agreements in certain proceedings as lawmakers seek to reinforce the city state’s status as a global disputes hub.

Singapore’s parliament approved reforms that will permit conditional fee agreements (CFAs) in international arbitration, following extensive consultation with the Law Society of Singapore, the judiciary, international law firms and others using Singapore as a regional hub for their work.

The introduction of no-win, no-fee agreements augments Singapore's decision in 2017 to allow litigation funding in commercial disputes, initially for international arbitrations and then expanded to other areas last year including Singapore International Commercial Court (SICC) proceedings and domestic arbitrations and mediations.

In a LinkedIn post, Edwin Tong SC, the Second Minister for Law, said: “This is an area which we had been more conservative in, because of concerns around officious intermeddling in litigation and potential conflicts of interest.” 

He added: “After calls from the ground and careful study of experiences elsewhere, we will allow CFAs in certain proceedings where litigants tend to be more commercially sophisticated and reassess the scope at a suitable juncture.”

The move was welcomed by Darius Chan, a door tenant at London’s Fountain Court Chambers, which has an annexe in Singapore.

Chan said: “This is a positive development which is seen as a natural progression from the introduction of third-party funding in 2017. These reforms respond to increasing client demand for flexibility in terms of how fee arrangements are structured. Such a move underscores the friendly competition between the major arbitral seats in attracting legal spend to their jurisdiction.”

Other Singapore-based lawyers agreed. Daniel Waldek, counsel at Herbert Smith Freehills in Singapore, said: "It's another critical step towards cementing Singapore's position as a global dispute resolution hub. It provides users with greater flexibility in their fee arrangements, whilst also promoting greater access to justice.”
 
He added: "Together with third-party funding, CFAs will provide clients with a greater diversity of options for risk-sharing when managing commercial disputes.”

In certain circumstances, the reforms also allow foreign lawyers to seek the SICC’s permission to plead in insolvency proceedings while restricting their ability to make submissions on Singaporean law.

Reforms made in September last year extended the SICC’s jurisdiction to hear cases of international and cross-border debt restructuring and insolvency, involving both foreign and domestic issues. 

While allowing proceedings to be heard in Singapore, it envisages a proper division of labour between local advocates and international law firms, ensuring the SICC maintains oversight, while allowing Singaporean submissions on areas of law germane to them.

The move follows the creation of a dedicated list devoted to construction, infrastructure and technology cases at the SICC. 

Sean Brannigan QC, of 4 Pump Court, said the change had been a “very welcome but unsurprising development,” with his set seeing an increase in instructions for infrastructure cases being resolved in Singapore.

Brannigan said Singapore had, in the last five years, “really stepped up its game in terms of becoming a hub for resolving infrastructure-related disputes across the Pacific Rim and further afield.” 

He added: “It appears to be constantly learning what works around the world in terms of these disputes and improving its offering.”