On October 23-24, 2015, Washington and Lee law professors Kish Parella and Victoria Sahani presented their latest works-in-progress at the American Society of International Law (ASIL) 2015 Research Forum hosted by American University’s Washington College of Law in Washington, DC. Professor Parella presented her latest draft of “The Value of Failed Treaties” and Professor Sahani presented her latest draft of “Reshaping Third-Party Funding.” They are among 70 participants selected for presentation based on a blind review process involving nearly 200 submissions worldwide.
From Prof. Parella’s abstract:
The scale of international agreements under negotiation, their controversial provisions and increasing opposition to them increases the risks that these potential treaties may fail. This Article seeks to lower the stakes by illustrating the beneficial effects of even failed treaties. Specifically, when treaties target the behavior of corporations and other business enterprises, international and national industry groups and corporate actors may improve the quantity and quality of their self-regulation through private standard-setting, monitoring and compliance activities. It is these “spillover effects” on industry self-regulation that changes corporate behavior and that may occur even in the absence of a treaty that enters into force.
This Article illustrates this new approach to treaty governance with a case study of another treaty that may likely fail: the international treaty on business and human rights. Drawing upon corporate reports, statements, industry manuals and guidelines, press releases and interviews, this Article illustrates the positive effects of failed or failing treaties on the industry self-regulation of business and human rights performed by the International Chamber of Commerce, International Organization of Employers, United States Council on International Business and other industry actors.
From Prof. Sahani’s abstract:
Third-party funding is an arrangement whereby an outside entity finances the legal representation of a party involved in litigation or arbitration. The outside entity – called a “third-party funder” – could be a bank, hedge fund, insurance company, or some other entity or individual that finances the party’s legal representation in return for a profit. Third-party funding is a controversial, dynamic, and evolving phenomenon. The structure of the third-party funding transaction often is depicted as a triangle shape connecting the funder, attorney, and client. This Article challenges the paradigmatic triangular or V-shaped representation of the third-party funding transaction between the funder, client, and attorney. It proposes other transaction structures that would be better suited to addressing potential problems, such as conflicts of interest, evidentiary privileges, and the funder’s exercise of control over the process. The Article argues that the uncertainty surrounding the effect of those and other potential problems creates risks for the funder, client, and attorney. Those risks in turn inflate the price of third-party funding capital. Reshaping the structure of the third-party funding transaction to mitigate those risks will reduce the price of third-party funding capital. This will give potential clients wider access to third-party funding and more bargaining power to keep a larger share of their winnings while still benefiting from third-party funding capital.
In addition, reshaping the third-party funding transaction will help guide legislative choices by better defining the funder’s role and the legal relationships that the laws aim to regulate and encourage. Furthermore, reshaping the transaction will give guidance to funders regarding appropriate transactional structures and will give attorneys a clearer sense of their obligations under their professional ethics rules. Moreover, clients will be better informed regarding the baseline structural choices that they should make when deciding whether to hire a particular funder. Finally, exploring multiple transaction structures for third-party funding will allow for flexibility in creating bespoke third-party funding arrangements and will better protect less sophisticated clients and parties.