Ethical Issues in Litigation Finance

The potential expense of bringing a case to trial often serves as a deterrent for attorneys, firms, and the parties to the lawsuit. Even when claims are meritorious, firms may not have the risk tolerance to try a case that could swallow too many resources or eat into their profit margins. At the same time, their clients may lack the resources to pay hourly rates or meet operating expenses for a case likely to proceed through trial. Appeals can cause even more financial strain. What options are available for parties who deserve their day in court and the lawyers that represent them?

The use of litigation finance in such situations has engendered spirited debate within the legal community. Attorney ethics requirements are a central focus of this debate. Issues including whether a funder’s investment impacts an attorney’s duty to use independent professional judgment, avoid conflicts of interest and protect the attorney-client and work product privileges all give rise to questions within the bar.

In this engaging and informative program, participants will learn how to use litigation funding as a modern means of ensuring that meritorious cases get the commitment of resources they deserve. The panel will address the basics of litigation finance and how the applicable Rules of Professional Responsibility intersect with litigation funding. A detailed appendix will be provided containing the ethics opinions and additional contents discussed during the program.

Learning Objectives:

1. Gain an understanding of the evolution and foundations of litigation finance
2. Learn how litigation finance and attorney ethics intersect, including a discussion of the Model Rules of Professional Conduct, including Model Rule1.7(a)(2)(material-limitations conflicts rule); Model Rule 1.8(a)(regulation of business transactions with clients); Model Rule 1.8(e)(financial assistance to clients); Model Rule 1.8(i)(acquiring a proprietary interest in a client’s cause of action); Model Rule 2.3 (hybrid confidentiality rules governing provision of evaluations to third party)
3. Review existing ethics decisions and other authoritative materials on the subject, including the American Bar Association’s Commission on Ethics 20/20 Informational Report on Alternative Litigation Finance and the New York City Bar Association Commission on Professional and Judicial Ethics, Formal Opinion 2011-2)(2011)
   
4. Learn how litigation financing can be ethically integrated into every step of litigation strategy (including on appeal)

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