Document Type
Article
Publication Date
12-2022
ISSN
0006-8047
Publisher
Boston University School of Law
Language
en-US
Abstract
Global commercial third-party funding has given rise to wide-ranging regulatory approaches worldwide. Consequently, funders can engage in cross-border regulatory arbitrage by exploiting regulatory gaps within and among nations. This Article argues that the global community of nations should articulate a universal approach to the behavioral expectations of third-party funders operating transnationally, independent of local laws regarding the technical business of funding. It asserts that the key to fostering the ethical development of the third-party funding industry is to develop a globally applicable but locally enforced code of conduct or professional responsibility for the industry. Moreover, a successful regime for funder professional responsibilities should be genuinely transnational, transsubstantive, and forum neutral. The ideal framework should also be clear but not rigid, and comprehensive but customizable. Individual governments, transnational regulatory efforts, and funders creating internal governance codes can then adopt the principles in this framework to achieve global harmonization.
This Article takes three crucial steps toward harmonizing the professional responsibility tenets for the third-party funding industry through a transnational, transsubstantive, and forum-neutral Model Code of Conduct for Third-Party Funders. First, this Article provides a brief overview of several existing approaches to regulating and enforcing third-party funding ethics and professional responsibility globally. Second, this Article distills from these existing approaches universal principles as the starting point for drafting a global Model Code of Conduct for Third-Party Funders in the future. Third, this Article discusses several implementation and enforcement options for such a code, including drawing an analogy to the successful and celebrated New York Convention, which is globally applicable but locally enforced. Finally, this Article concludes by proposing avenues for further inquiry to bring this idea to fruition.
Recommended Citation
Victoria Sahani,
"Keep To the Code”: A Global Code of Conduct for Third-Party Funders
,
in
102
Boston University Law Review
2331
(2022).
Available at:
https://scholarship.law.bu.edu/faculty_scholarship/3487
