ABSTRACT
In litigation and other forms of dispute resolution, parties usually incur substantial costs. Apart from the time spent in court and the so-called ‘opportunity cost’ involved in litigation, civil proceedings give rise to attorney fees, expert and witness costs, court fees and reimbursements. Some of these costs may be recouped; others may remain where they happen to fall. How does the exposure to cost risks affect litigation strategy? And to what extent does the opportunity to shift costs on to the adversary inuence these strategies? Does the legal framework for litigation cost allocation (cost-shifting rules) further inuence the litigants’ behaviour? And how do private nancing arrangements such as insurance and third-party funding (TPF) t into this picture? Do funders exercise specic powers over parties and their lawyers? Do they introduce certain dynamics to the proceedings that would otherwise not exist? And, if so, is that bad? Should there be a legal framework in place to restrain these third parties or should this best be left to market forces?
