Ethics

Litigation finance has overcome initial skepticism regarding litigation funding due to potential ethics issues, such as fee-splitting rules, maintenance, and champerty. Furthermore, modern third-party funding practices do not conflict with such duties as attorney/client privilege, attorney independence, and the work product doctrine.

Litigation Finance Disclosure — It’s the Claimant’s Choice, for Now

Garrett Ordower

Claimants considering litigation financing often ask whether financing must be disclosed to U.S. courts. The answer in federal courts – for now – is no (save one limited exception).

Rule 26 of the Federal Rules of Civil Procedure currently requires initial disclosure of a broad range of information including the documents and other materials the party expects to use to support its claims or defenses, the computation of categories of damages, the identification of those who might have discoverable information, and insurance agreements. But the rule doesn’t require all potential disclosures, including for example, litigation financing arrangements.

Read More

Third Party Funding in International Arbitration – Rising Interest, Rising Protections for Funded Parties

Marla Decker

Third party funding of international arbitration disputes has been a hot topic for some time, and more and more we see its globalization take hold. Third party funding and international arbitration are a natural fit because of the great risks, high costs, and large amounts at stake in international arbitration disputes. Third party funding allows those costs and risks to be mitigated by the funder in exchange for a share of the potential award. In the past year, we have seen a noticeable uptick in the number of claimants seeking funding for international arbitration claims. (Lake Whillans funds U.S and Canadian litigation as well as domestic and international arbitration).

Read More

Litigation Finance Ethics Primer

Marla Decker

The results reflect the growing norm of litigation funding. Forty percent of respondents have had firsthand experience working with a litigation finance firm. Interestingly, law firms with the most experience using litigation finance were the very largest and very smallest firms surveyed: law firm size of 500+ lawyers (48.57%) and law firm size of 2 – 5 lawyers (58.54%). Litigators whose practice concerns the energy industry had the highest proportion of firsthand experience followed by the technology sector; finance/banking had the lowest. A resounding 85% of those with firsthand litigation finance experience would use it again.

For those without firsthand experience, the most commonly cited reason for ruling out the possibility of litigation finance by nearly 75% of negative respondents was “ethical reservations.” We’d like to address those reservations with a primer on the ethics of litigation finance.

Read More

Racing to The Start Line: Singapore & Hong Kong Take Steps To Permit Third Party Funding

Marla Decker

Recently, the race in Asia has led Hong Kong and Singapore to introduce legislation that would enable the use of third-party funding in arbitrations seated there. Lake Whillans funds litigation and arbitration globally, and we asked Nicholas Lingard, Robert Kirkness and Emily Stennett of Freshfields Bruckhaus Deringer’s international arbitration practice in Asia to detail the recent developments in Hong Kong and Singapore.

Read More

UK High Court Affirms Arbitral Ruling that Party Can Recover Litigation Finance Costs

Marla Decker

The High Court decided an appeal brought by Essar Oilfield Services, which challenged an award granted in an ICC arbitration to Norscot Rig Management, in which the arbitrator directed Essar to pay not only Norscot’s damages and attorneys’ fees, but also Norscot’s costs of litigation financing. In the dispute between the two oil and gas companies, Norscot used financing to pay for its £647,000 in attorneys’ fees, and, as a result of the successful arbitration, Norscot was obligated to the funder for the greater of three-times that amount or 35% of the damages award. (The amount of the damage award has not been reported.) Essar challenged the arbitrator’s authority to award the litigation finance costs in the High Court.

Read More

Litigation Finance: Creating a Code of Conduct

Lee Drucker

In mature industries, there is usually a set of rules outlining best practices for individuals and organizations. In newly developing industries, however, best practices are less clear, and once established spread more slowly. In order to promote the development of best practices in litigation finance, we recently identified key aspects of a funding arrangement that we believe will lead to the best results for a claimholder. Companies considering a litigation financing offer should consider the following principles and their importance:

Read More

Delaware Recognizes Distinction Between Litigation Finance and Champerty

Marla Decker

Last week, the Delaware Superior Court held that a litigation finance arrangement does not run afoul of the medieval doctrines prohibiting champerty and maintenance. These laws, which were originated by medieval kings who were annoyed by vexatious litigation of feudal lords, are still recognized in Delaware though their application has been very much limited.

Read More

Three Ways Litigation Finance Changes Your Job: Inside & Out

Lee Drucker

This post was contributed by Bill Patterson; he was the general counsel of Business Logic where he oversaw a “bet-the-company” litigation. He now manages complex litigation at Swanson, Martin & Bell. You can contact Bill at bpatterson@smbtrials.com.

Litigation finance is here to stay. Having worked as outside counsel, in-house and now as outside counsel again, I can confidently make that statement. There are three fundamental ways litigation finance changes your job, whether you’re inside or out.

Read More

Litigation Finance: Ethics Q & A

Boaz Weinstein

I recently had the pleasure of participating in a panel discussion on litigation finance hosted by the Association of Business Trial Lawyers in Ojai, California. The audience was engaged and asked a variety of questions, including many on ethical considerations related to litigation finance. Since this topic seems to be top of mind for lawyers when it comes to litigation finance, we offer the following sample Q&A:

Read More
Contact Us


The best way for companies and their counsel to determine if litigation finance is an attractive option is to discuss it with us.