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.
Champerty, maintenance, and barratry are related doctrines that trace their roots back to medieval England. The United States Supreme Court has succinctly described the three doctrines as follows: “Put simply, maintenance is helping another prosecute a suit; champerty is maintaining a suit in return for a financial interest in the outcome; and barratry is a…
Published by: Lake Whillans & Above The Law Welcome to the 2023 Lake Whillans/Above the Law litigation finance survey report. Since 2017, we have invited in-house counsel and law firm attorneys to share their perspectives on third-party litigation funding as part of our effort to monitor developments in this rapidly evolving field. Their feedback has…
There is a growing body of case law across multiple jurisdictions (including those that regularly see high stakes commercial litigation) holding that communications with litigation funders will not effect a waiver of work product protection, assuming the parties take common-sense precautions such as signing a non-disclosure agreement. A recent case from the Eastern District of Texas adds to that jurisprudence, holding that attorney memos prepared for and shared with prospective litigation funders are protected attorney work product, even under the 5th Circuit’s comparatively narrower test for what qualifies as work product.
Recently, I met a General Counsel of a mid-cap company who had only just learned about litigation finance. She was both intrigued about the possibilities that litigation funding could unlock for her company (as a company with an active litigation docket) and dismayed that she hadn’t heard of this option sooner: “Why haven’t my outside counsel told me about this?”
Our conversation reinforced that even though litigation finance is increasingly well-known among litigators, there remains substantial opportunity for education, especially among in-house counsel. But the GC’s question also made me consider whether the pendulum has now swung from the industry’s early days when counsel questioned whether they were ethically permitted to inform their clients about litigation funding to a point where counsel now have an affirmative duty to inform their clients about litigation funding as an option to finance litigation costs?
Mandatory disclosure of litigation funding has arrived in the District of Delaware — at least in the courtroom of Chief Judge Connolly. In an April standing order, the Chief Judge directed parties appearing before him to disclose the identity of any third-party funders within 45 days for currently pending cases and 30 days for newly filed actions.
Published by: Lake Whillans & Above The Law Every year since 2017, Lake Whillans and Above the Law have asked in-house counsel and law firm attorneys to share their perspectives on third-party litigation funding. Our survey has tracked the growth of this field and shows that an increasing number of law firms and their clients…
I recently attended the LITFINCON conference in Houston, Texas. This was my first in-person conference I attended in 2+ years, and it was a welcome breath of fresh Texas (blissfully warm) air.
The conference organizers (Siltstone Capital and Litigo Financial) did a great job of creating a diverse set of topics and finding great panelists. Speakers included funders, law firm partners, general counsel, brokers, investors and even judges. We covered a wide range of topics including the basics of litigation funding, litigation finance as a maturing asset class, the role of brokers, rise of secondary markets, and even the intersection of litigation funding with block chain. The stars of the show were probably the judicial panelists, including two federal judges from the Southern District of Texas, and a Texas state court judge. It’s unusual to get a view from the judiciary outside of the courtroom, let alone one on litigation finance, and this panel was particularly engaged and candid about their knowledge and impressions.
n general, the U.S. legal system requires parties to bear their own costs, and does not automate “loser-pays” rules like other jurisdictions or arbitral institutions. There are certain exceptions, notably when the dispute arises under a contract providing that the prevailing party will be entitled to its fees and costs. An incentive to both parties to include such a provision is so that each party will truly be “made whole” after any dispute, rather than netting from any recovery the costs of legal fees and expenses.
In addition to providing finance for commercial litigation cases in the U.S. and Canada, Lake Whillans routinely funds claimants in arbitrations. In recent years there has been increasing attention to litigation funding arrangements in arbitrations, and a number of arbitral institutions have inserted rules to address the practice, both to increase transparency and to promote fairness to both sides. One emerging question in the field, where cost-shifting to the losing party is a typical part of awards, is whether tribunals will award a prevailing claimant the value of its litigation funding costs, in addition to damages and other legal costs. The confidential nature of most commercial arbitral awards makes it difficult to know how often this occurs (or has even been sought), but tribunals have permitted claimants to recover funding costs in some instances. And there is growing precedent to indicate that where tribunals award funding costs, courts will not second-guess the decision — at least for arbitrations sited in England and Wales.
