Commercial Disputes Lawyers Singapore 2026: Third‑party Funding, DAB Notices & Costs

Last reviewed: 9 May 2026

Singapore’s 2026 Civil Justice Reforms have fundamentally reshaped the landscape for commercial disputes lawyers and the clients they advise. The statutory abolition of the torts of maintenance and champerty, combined with a new framework that expressly permits third‑party funding for prescribed categories of disputes, gives general counsel and commercial litigators both fresh strategic options and urgent compliance obligations. At the same time, reformed cost‑shifting rules and evolving Singapore High Court (SGHC) guidance on Dispute Adjudication Board (DAB) challenges mean that dispute resolution clause drafting, disclosure mechanics and DAB response strategy all require immediate attention.

This article provides the practical playbook, checklists, sample clauses and timed workflows, that in‑house teams and external counsel need to navigate litigation funding in Singapore in 2026 and beyond.

Executive Summary: What GCs Must Know Right Now

The reforms touch virtually every stage of a commercial dispute. Before reading further, here are the three headline legal changes and five immediate action points every general counsel should act on.

Three‑line legal summary:

• Maintenance and champerty abolished. The Civil Law Act amendments removed both common‑law torts and related criminal offences, eliminating the historic bar on third parties financing another party’s litigation or arbitration (Civil Law Act (Cap. 43)).
• Third‑party funding expressly permitted for prescribed disputes. A statutory and regulatory framework now authorises commercial funders to finance specified categories of disputes, subject to disclosure and conduct requirements (Ministry of Law Guidance Note).
• Cost‑shifting rules reformed. Courts and tribunals now have clarified discretion to consider funding arrangements when making cost orders, changing risk allocation for both claimants and respondents.

Five immediate action points for GCs:

1. Audit existing dispute resolution clauses in all live contracts, check whether they accommodate or inadvertently restrict third‑party funding.
2. Update template arbitration and jurisdiction clauses to include express funding recognition and costs allocation wording.
3. Establish an internal protocol for evaluating, approving and disclosing third‑party funding arrangements.
4. Review all pending DAB decisions, confirm that your response timeline and notice of dissatisfaction procedures comply with current SGHC guidance.
5. Brief external commercial disputes lawyers on your position regarding funded opponents, adverse costs exposure and indemnity requirements.

Background: Civil Justice Reforms 2026, What Changed

The Civil Justice Reforms 2026 represent the most significant overhaul of Singapore’s civil dispute infrastructure in over a decade. The legislative package amended the Civil Law Act and related statutes, abolished the common‑law torts of maintenance and champerty, and introduced a phased regime for permissioned third‑party funding across different categories of disputes (Civil Law Act (Cap. 43), amended provisions). The Ministry of Law adopted a deliberate phased approach: initial categories of prescribed disputes were identified and authorised first, with subsequent phases expected to widen the scope as the market matures and regulatory experience accumulates (MoL Guidance Note on Third‑Party Funding).

For commercial disputes lawyers and their clients, the practical significance is twofold. First, the torts that previously made funding agreements potentially void or unenforceable as a matter of public policy no longer exist. Second, the reforms do not create an unregulated free‑for‑all, funding is permissioned, disclosure is mandatory in prescribed circumstances, and the courts retain discretion over costs. The table below outlines the key reform milestones and their practice impact.

Industry observers expect the phased approach to expand the list of prescribed disputes within the next 12 to 18 months, with domestic litigation and certain insolvency claims among the likely candidates for inclusion in later phases.

Third‑Party Funding in Singapore: When Permitted, Types, Disclosure & Procedure

What is third‑party funding under the Civil Law Act?

Third‑party funding, as defined by the amended Civil Law Act, refers to an arrangement under which a person who is not a party to the dispute provides funds to a party to that dispute in return for a financial benefit, typically a share of any damages recovered or settlement proceeds (Civil Law Act (Cap. 43)). This statutory definition deliberately casts a wide net, capturing commercial litigation funders, portfolio funding structures and, in certain circumstances, after‑the‑event (ATE) insurance arrangements.

The critical qualifier is that funding is only expressly permitted for prescribed disputes. The Ministry of Law’s Guidance Note identifies these categories in phases. The initial phase covers international arbitration proceedings (including those seated in Singapore under SIAC Rules), related court and mediation proceedings, and proceedings commenced in the Singapore International Commercial Court (SICC). Subsequent phases are expected to extend to additional categories of domestic litigation (MoL Guidance Note).

Who can act as a funder?

The framework distinguishes between entities that qualify as funders and those that do not. Qualifying third‑party funders must meet prescribed capital adequacy requirements and adhere to the conduct standards set out in the MoL Guidance Note. Industry observers note that this creates a de facto registration gateway, while there is no formal licensing regime, funders that fail to meet the prescribed standards risk having their funding agreements treated as unenforceable or their funded party facing adverse costs consequences (Chambers Practice Guides, Litigation Funding 2026).

Disclosure and procedural obligations

Disclosure sits at the heart of the new regime. The reforms impose distinct obligations depending on the type of party and the forum. The table below summarises these obligations:

Sample funding disclosure wording

The following illustrative wording can be adapted for use in initial filings or correspondence with the tribunal. All templates in this article are provided for general guidance only and must be reviewed by qualified commercial disputes lawyers before use.

“The [Claimant/Respondent] hereby gives notice, pursuant to [applicable provision/rule], that it has entered into a third‑party funding arrangement with [Funder Name], a qualifying funder within the meaning of the Civil Law Act (Cap. 43) as amended. The existence and identity of the funder are disclosed in compliance with the prescribed disclosure obligations. Further particulars of the funding arrangement will be provided to the Tribunal/Court upon direction.”

Conflict and ethical considerations for counsel

Counsel acting for a funded party must remain alert to potential conflicts of interest. The funder’s commercial interest in the outcome of the dispute does not automatically create a conflict, but situations can arise, for example, where the funder seeks to influence settlement decisions, select experts or control litigation strategy. The MoL Guidance Note reinforces that the funded party’s legal representatives owe duties to the party, not the funder. Counsel should document the boundaries of funder involvement at the outset and review these periodically as the case progresses (Law Gazette, Third‑Party Funding: Taking Stock).

Drafting Dispute Resolution Clauses After the Reforms

The 2026 reforms make dispute resolution clause drafting a front‑line compliance and commercial exercise. Clauses drafted before the reforms may be silent on third‑party funding, may contain boilerplate costs provisions that create unintended exposure, or may omit DAB mechanisms altogether. Commercial disputes lawyers should treat every new or renegotiated contract as an opportunity to future‑proof the dispute resolution architecture.

Annotated SIAC arbitration clause with funding acknowledgment

Illustrative clause, to be reviewed and adapted by qualified counsel before incorporation into any agreement:

“Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration seated in Singapore and administered by the Singapore International Arbitration Centre (‘SIAC’) in accordance with the Arbitration Rules of SIAC for the time being in force, which rules are deemed to be incorporated by reference into this clause.

The parties acknowledge that either party may enter into a third‑party funding arrangement in respect of any dispute, subject to applicable law and disclosure obligations. Each party shall comply with any disclosure requirements prescribed under the Civil Law Act (Cap. 43) as amended and the applicable SIAC rules or practice notes.”

Plain‑English explanation: This clause seats arbitration in Singapore under SIAC Rules, preserves the right of either party to seek third‑party funding, and requires compliance with statutory and institutional disclosure obligations. Parties negotiating this clause should consider whether to add express provisions on costs allocation where one or both parties are funded.

Costs allocation clause, optional add‑on

“In the event that either party has entered into a third‑party funding arrangement, the tribunal shall have discretion to take the existence and terms of that arrangement into account when making any order as to costs, including but not limited to orders for security for costs. The funded party shall, upon the tribunal’s request, provide such information regarding the funding arrangement as may be necessary for the tribunal to exercise its discretion.”

Negotiation point: Respondents may push for a right to apply for security for costs against funded claimants. Claimants should ensure that any costs clause does not inadvertently allow the tribunal to penalise a party solely for being funded.

Red flags for GCs reviewing funding clauses

• Unilateral funding restrictions. Clauses that restrict only one party from obtaining funding may be challengeable as unfair or contrary to public policy post‑reform.
• Undefined “material terms” disclosure. Ambiguity about what must be disclosed creates a risk of procedural disputes, specify the scope of disclosure or cross‑refer to the MoL Guidance Note.
• Silence on costs consequences. Omitting any reference to costs allocation where funding is used leaves the question entirely to tribunal discretion, which may not align with either party’s commercial expectations.
• No DAB mechanism in construction or infrastructure contracts. Failing to include a DAB clause or a clear dissatisfaction notice procedure creates enforcement gaps and delays dispute resolution.

Responding to DAB Decisions: Notice of Dissatisfaction, Procedural Steps & Enforcement Playbook

Dispute Adjudication Board decisions are a critical stage in construction and infrastructure disputes. The SGHC has issued guidance clarifying the procedural requirements for challenging or enforcing DAB decisions, and recent published decisions available on eLitigation reinforce the importance of strict compliance with time limits. For commercial disputes lawyers advising on DAB matters, the following step‑by‑step playbook provides a practical framework.

Step 1, Immediate assessment upon receipt of DAB decision

The moment a DAB decision is received, the clock starts running. The dissatisfied party must serve a DAB notice of dissatisfaction within the contractually stipulated period, typically 28 days, though the precise period depends on the underlying contract (e.g., FIDIC conditions). Failure to serve within this window can render the DAB decision final and binding.

• Day 0: Receive and log the DAB decision. Diarise the deadline for serving the notice of dissatisfaction.
• Days 1–7: Assess the merits, identify grounds for dissatisfaction and whether the decision is commercially acceptable.
• Days 7–14: Prepare and internally approve the notice of dissatisfaction. Instruct external counsel if not already instructed.
• Days 14–28: Serve the notice of dissatisfaction on the other party and the DAB within the prescribed period. Confirm receipt.

Step 2, Sample DAB notice of dissatisfaction

Illustrative template, must be reviewed and adapted by qualified counsel to reflect the specific contractual terms:

“To: [Other Party] and [DAB Members]

Re: Notice of Dissatisfaction, DAB Decision dated [Date] in respect of [Project Name / Contract Reference]

Pursuant to [Sub‑Clause reference, e.g., Sub‑Clause 20.4 of the FIDIC Conditions of Contract], [Party Name] hereby gives notice that it is dissatisfied with the DAB Decision dated [Date] and intends to refer the dispute to [arbitration / the agreed dispute resolution procedure].

The grounds of dissatisfaction are: [set out each ground with sufficient particularity to identify the issue(s) in dispute].

This notice is given within the time prescribed under the Contract and without prejudice to [Party Name]’s rights and remedies.

Signed: _______________”

Step 3, Strategic options after serving notice

Once the notice of dissatisfaction is served, the dissatisfied party faces several strategic decisions:

• Refer to arbitration. The most common path, initiate arbitration under the contractual arbitration clause (typically SIAC for Singapore‑seated disputes). The DAB decision remains binding but not final until the arbitral tribunal issues its award.
• Seek interim enforcement. The non‑dissatisfied party may apply to enforce the DAB decision as a binding interim obligation. SGHC guidance supports enforcement of binding (but not final) DAB decisions pending arbitration.
• Negotiate settlement. Use the notice period and early arbitration phase to explore commercial resolution, the DAB decision provides a useful reference point for settlement discussions.
• Consider third‑party funding for the arbitration. Where the claim is large enough, the dissatisfied party may seek litigation funding in Singapore 2026 to finance the arbitration, subject to the disclosure and procedural requirements discussed above.

Step 4, Model client memo checklist for GCs

• Confirm the contractual deadline for the notice of dissatisfaction and verify it has been served in time.
• Assess the commercial value of the dispute and whether the grounds of dissatisfaction are sustainable.
• Determine whether the DAB decision should be enforced (if favourable) or challenged (if unfavourable).
• Evaluate whether third‑party funding is appropriate and, if so, initiate the funding approval process.
• Instruct commercial disputes lawyers to prepare the arbitration referral and identify the applicable institutional rules.
• Review costs exposure and consider whether adverse costs insurance or funder indemnities are needed.

Cost‑Shifting Rules Post‑2026: What to Expect and Practical Advice

The 2026 reforms clarified and broadened the discretion of courts and tribunals to consider third‑party funding when making costs orders. Under the reformed cost‑shifting rules, the existence of a funding arrangement is no longer a neutral fact, it is a relevant factor that may influence the quantum and incidence of costs awarded against or in favour of a funded party (Civil Law Act (Cap. 43), amended provisions).

Early indications suggest that the SGHC and arbitral tribunals seated in Singapore are adopting a pragmatic approach: funding alone is not a basis for punitive costs orders, but it may support applications for security for costs or upward adjustments where the funded party’s costs exposure is effectively underwritten by a third party.

Negotiating funding agreements to manage costs risk: General counsel should insist on the following protections when negotiating funding agreements:

• Adverse costs indemnity: The funder agrees to indemnify the funded party against costs orders made in favour of the opposing party.
• Costs cap: A defined cap on the funder’s total exposure to adverse costs, ensuring the funded party is not left with uncovered liability if the cap is exceeded.
• Ring‑fenced costs reserve: A portion of the funding commitment is allocated specifically to cover potential adverse costs orders.
• Waterfall provision: The funding agreement specifies the priority of payments from any recovery, costs first, then funder’s return, then balance to the funded party.

Practical Checklists, Negotiation Templates & Sample Clauses

The following checklists and templates consolidate the guidance in this article into copyable, in‑house‑ready formats. All templates are illustrative and must be reviewed by qualified commercial disputes lawyers before use.

Checklist A, Third‑party funding intake and approval (for GCs)

• Confirm the dispute falls within a “prescribed dispute” category under the MoL Guidance Note.
• Verify the proposed funder meets capital adequacy and conduct standards.
• Obtain internal board or committee approval for the funding arrangement.
• Review the funding agreement for conflicts, control provisions and termination rights.
• Confirm disclosure obligations and prepare the prescribed funder notice.
• Assess costs exposure and ensure adverse costs indemnity, cap and reserve are in place.
• Instruct counsel to manage privilege boundaries and funder communications protocol.

Checklist B, Funding agreement negotiation

• Define the scope of funded disputes (single claim, portfolio, counterclaims).
• Agree the funder’s financial return (percentage of recovery, multiple of investment, or hybrid).
• Set the funder’s approval rights over settlement (right to be consulted vs. right to veto).
• Negotiate the adverse costs indemnity and costs cap.
• Establish the waterfall for distribution of proceeds.
• Address termination events (material adverse change, failure to fund, insolvency of funder).
• Include confidentiality and privilege‑protection provisions.
• Agree the disclosure protocol, what, when and to whom.

Checklist C, Clause bank

SIAC arbitration clause (with funding and costs provisions): See the annotated clause in the Drafting section above.

DAB dissatisfaction notice template: See the sample notice in the DAB Playbook section above.

Funding disclosure wording: See the sample disclosure wording in the Third‑Party Funding section above.

Conclusion: Recommended Next Steps for Commercial Disputes Lawyers and GCs

The 2026 Civil Justice Reforms have created both opportunity and obligation. Third‑party funding is now a lawful and increasingly practical option for financing prescribed disputes in Singapore, but it comes with disclosure requirements, costs implications and strategic considerations that demand careful planning. DAB response strategy requires strict procedural compliance and timely action. Dispute resolution clause drafting must evolve to reflect the new funding environment and reformed cost‑shifting rules.

For general counsel and commercial disputes lawyers navigating these reforms, three steps should be prioritised immediately: audit and update all dispute resolution clauses to reflect the new framework, establish internal funding approval and disclosure protocols, and ensure DAB response timelines are diarised and monitored. To find commercial disputes lawyers in Singapore with specific experience in third‑party funding, DAB challenges and the 2026 reforms, consult the Global Law Experts directory for qualified practitioners.

Sources

1. Ministry of Law (Singapore), Guidance Note: Third‑Party Funding
2. Civil Law Act (Cap. 43), Singapore Statutes Online (SSO/AGC)
3. eLitigation, SGHC Published Decisions
4. Chambers Practice Guides, Litigation Funding 2026 (Singapore)
5. Singapore International Arbitration Centre (SIAC), Rules and Guidance
6. The Law Gazette (Singapore), Third‑Party Funding: Taking Stock
7. Practical Law / Thomson Reuters, Third‑Party Funding Overview