The common law concept of champerty and maintenance is rooted in the principles of good faith and judicial economy. In any given country, the State provides certain services, such as a military, police force, lawmakers, and courts. Because courts are maintained at the public's expense, the time and resources they take to decide cases essentially becomes "public time," financed by taxpayers.
It was within this context that champerty and maintenance rules arose. When a third party to a dispute finances it - not merely to assist the claimant, or defendant, in seeing justice done, but to profit from the venture - the argument could be made that the third-party funder is unjustly enriched, because his venture requires using up a scarce, public resource.
Now arguments could, and have been, made to the contrary, which is why champerty and maintenance rules have met different fates in different common law countries, but none of that matters for this discussion.
Champerty and maintenance rules aren't relevant in the investor-state arbitration context because cases are heard before ad hoc, international tribunals, rather than domestic courts. These tribunals are always funded by the parties to the dispute, and they have the authority to apportion costs against the losing party. Hence, there is no issue of a limited public resource being exhausted for private profit.
I'm a little pressed for time, so let's just take a quick boo at the last two paragraphs:
"Because only corporations, not governments, can launch ISDS cases, governments have no equivalent funding sources, as they have no potential winnings to leverage."
-> Well, no, it is obviously false to state that "only corporations" can launch ISDS cases. In my experience, the plurality of claims have been made by individuals.
-> And, no, it is not accurate to suggest that governments cannot, or do not, take advantage of the products offered by these financial service providers, including insurance products regarding award amounts, or the potential for cost allocations as part of an award.
"This is a crucially-important point about corporate sovereignty: governments never win ISDS cases; at best, they just don't lose them. All the upside is with the corporates that bring the claim, and all the downside with nations that are defending their actions and regulations. The new wave of third-party funding will accentuate that skewed nature, and make corporate sovereignty even more of a scourge than it is today, regardless of whether it is ever included again in any new deal."
-> Only the most statist of mindsets could conceive of this argument. The juxtaposition of "corporations" with "governments" is the first 'tell.'
-> Also implicit in the claim is the ludicrous premise that everything governments do is good and everything corporations might do in opposition to governments is bad.
-> Surely the appropriate question would be whether society "wins" by virtue of having: (1) rules that prevent/limit unfair treatment of foreign investment; and (2) a dispute settlement mechanism for the prosecution of claims when such rules have been breached.
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Re: Word of the day
It was within this context that champerty and maintenance rules arose. When a third party to a dispute finances it - not merely to assist the claimant, or defendant, in seeing justice done, but to profit from the venture - the argument could be made that the third-party funder is unjustly enriched, because his venture requires using up a scarce, public resource.
Now arguments could, and have been, made to the contrary, which is why champerty and maintenance rules have met different fates in different common law countries, but none of that matters for this discussion.
Champerty and maintenance rules aren't relevant in the investor-state arbitration context because cases are heard before ad hoc, international tribunals, rather than domestic courts. These tribunals are always funded by the parties to the dispute, and they have the authority to apportion costs against the losing party. Hence, there is no issue of a limited public resource being exhausted for private profit.
Ignorance is Bliss, One Supposes
I'm a little pressed for time, so let's just take a quick boo at the last two paragraphs:
"Because only corporations, not governments, can launch ISDS cases, governments have no equivalent funding sources, as they have no potential winnings to leverage."
-> Well, no, it is obviously false to state that "only corporations" can launch ISDS cases. In my experience, the plurality of claims have been made by individuals.
-> And, no, it is not accurate to suggest that governments cannot, or do not, take advantage of the products offered by these financial service providers, including insurance products regarding award amounts, or the potential for cost allocations as part of an award.
"This is a crucially-important point about corporate sovereignty: governments never win ISDS cases; at best, they just don't lose them. All the upside is with the corporates that bring the claim, and all the downside with nations that are defending their actions and regulations. The new wave of third-party funding will accentuate that skewed nature, and make corporate sovereignty even more of a scourge than it is today, regardless of whether it is ever included again in any new deal."
-> Only the most statist of mindsets could conceive of this argument. The juxtaposition of "corporations" with "governments" is the first 'tell.'
-> Also implicit in the claim is the ludicrous premise that everything governments do is good and everything corporations might do in opposition to governments is bad.
-> Surely the appropriate question would be whether society "wins" by virtue of having: (1) rules that prevent/limit unfair treatment of foreign investment; and (2) a dispute settlement mechanism for the prosecution of claims when such rules have been breached.
Techdirt has not posted any stories submitted by @ISDS_Guru.
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