How do litigation funders source investment treaty claims?
Litigation funders source investment treaty claims mostly through the claimant's lawyers, sometimes through brokers, and increasingly by watching government measures against foreign investors themselves. A third-party funder, in the working meaning used by the ICCA-Queen Mary Task Force, has no interest in the merits but pays the legal costs of an arbitration in return for a share of the outcome.
Counsel-led deal flow works. Its weakness is timing, and that is what this piece is about. The glossary entry on third-party funding covers the basics.
Why do funders tend to see the same deals at the same time?
Because the deals come through the same door. A claimant's counsel scopes the case, builds the damages story and then approaches several funders at once. By that point the terms are being shopped.
Disclosure rules make the market more visible later, not earlier. Under Rule 14 of ICSID's 2022 Arbitration Rules, in force since 1 July 2022, a party must name any non-party funder when its request is registered. That tells the market who funded a case. It doesn't help anyone find the next one.
Relationships with claimant firms still matter most, and nothing here replaces them. In Europe there is a structural reason too: the CCBE Code of Conduct bars lawyers from a fee agreed as a share of the result, so many claimants who need financing look outside their law firm.
What makes an investment treaty claim fundable?
Six things, and the last one sinks more deals than the first five. The claimant must be a protected investor with a qualifying investment. A treaty in force must contain the state's consent. The merits must hold. The amount at stake must justify years of costs. The timing must work, given that about 90% of bilateral investment treaties impose a cooling-off period, most often six months. And the award must be collectable.
Collectability is where funders and lawyers look at the same case differently. In Nachingwea U.K. Limited v. Tanzania, the tribunal awarded roughly US$76.7m in damages plus interest, and US$3.86m in costs. Whether and how fast that money is paid decides the return.
Where can a funder see a claim earlier?
At the measure itself. Executive Order 13990 revoked the Keystone XL permit on 20 January 2021, and TC Energy filed its request for arbitration on 22 November 2021, about ten months later. Tanzania cancelled all mining retention licences on 10 January 2018; the treaty claim followed about two years on.
In both cases the measure was public on day one. Most aren't reported in English, though, and few mention a treaty. Sector focus helps: in 2025 mining made up 24% of new ICSID cases and oil and gas 21%. Our page on early warning of investment treaty disputes explains what to watch.
How does early sourcing fit into underwriting?
As the top of the funnel. An early lead tells a funder that a claim may exist and roughly what shape it has. It does not replace diligence on the claimant, the treaty, quantum or enforcement.
The practical gain is time. A funder that has already screened a measure for treaty coverage and collectability can move quickly when counsel arrives, or pass a promising lead to a firm it trusts. We would screen in days and diligence in weeks, not the other way round.
What this means for funders
Deal flow through counsel will stay the core of the business. The funders with an edge will be the ones who already know a case when it reaches them.
DSPT Finder is an AI tool that sources international arbitration leads. It flags government measures against foreign investors in more than 159 countries, with a first view of each potential claim. Our page on investment treaty claim sourcing for litigation funders explains how funders use it.
For what comes before a filing, see notice of intent in investment arbitration; for where claims cluster, ICSID caseload trends in 2026.
Frequently asked questions
What is third-party funding in investment arbitration?
A third-party funder pays the legal costs of a claim, usually in return for a share of any award. The ICCA-Queen Mary Task Force describes a funder as an entity with no interest in the merits that finances the costs of an arbitration.
Do funders have to be disclosed in ICSID cases?
Yes. Rule 14 of ICSID's 2022 Arbitration Rules, in force since 1 July 2022, requires a party to disclose the name and address of any non-party funder when the request for arbitration is registered.
How big is the market for funding investment treaty claims?
Nobody knows precisely. The 2018 ICCA-Queen Mary Task Force report said relevant empirical data on funding in investment claims is not generally available, so treat any market-size figure with care.
What makes an investment treaty claim attractive to a funder?
A protected investor, a treaty with the state's consent, strong merits, enough money at stake, a workable timeline and, above all, an award the state can or will pay.
Can a funder find investment treaty claims before they are filed?
Yes, by watching the government measures that cause them. Monitoring tools such as DSPT Finder flag those measures in 32 languages, often months before a notice of intent or a claim.