Influence. It’s one of the key concerns that lawmakers have about third-party litigation funding. The fear is that funders, who do not have a direct connection to a legal dispute, yet fund it in the hopes of earning a share of the award, may unduly influence decisions about the case that may adversely impact courts, plaintiffs, or defendants. So what happens when funded cases involve one or more federal governments?
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
Influence. It’s one of the key concerns that lawmakers have about third-party litigation funding. The fear is that funders, who do not have a direct connection to a legal dispute, yet fund it in the hopes of earning a share of the award, may unduly influence decisions about the case that may adversely impact courts, plaintiffs, or defendants. So what happens when funded cases involve one or more federal governments?
Defense One details that in some instances, litigation isn’t used strictly to address grievances. Litigation can also be used unscrupulously to cause delays, for harassment, to publicly humiliate someone, or to gain access to confidential information that can’t be obtained by other means. There are laws against malicious litigation, but some say that the increase in access to the global legal theater may render these laws insufficient to prevent grievous harm.
As litigation funding grows in popularity, so do the cries to regulate and control the practice. Some say it’s time to look at the impact this practice can have on national security. For example, as transparency laws come into effect, disclosures once kept private may now be widely shared. These waters are murky, as jurisdictional inconsistencies lead to confusion on a global scale.
While the legal funding industry has done a commendable job of self-regulating, their guidelines for conduct and best practices are not legally binding, nor are they accepted industry-wide or worldwide. Now, industry and government leaders are questioning how transparency provisions should be altered in order to protect national security interests.
Therein lies the issue. We cannot know if foreign or malicious interference is happening without meaningful transparency laws. Foreign lobbying, global connections, and jurisdictional discrepancies all engender the need to amass data, as well as gain input from industry leaders, and find ways to mitigate the risks inherent to disclosures and transparency among third-party funders in multinational cases.
