According to a Bloomberg survey, 88% of lawyers believe that third-party legal funding increases access to justice. Noted legal scholar Maya Steinitz describes the practice as the most important development in civil justice in this generation.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
According to a Bloomberg survey, 88% of lawyers believe that third-party legal funding increases access to justice. Noted legal scholar Maya Steinitz describes the practice as the most important development in civil justice in this generation.
American Bar Association explains that despite some detractors, litigation funding has ingratiated itself firmly into the legal world, and shows no signs of slowing. Legislation is catching up, expanding the uniform application of rules and guidelines regardless of jurisdiction. At the same time, common misperceptions persist.
Some lawyers worry that if they obtain third-party legal funding, they must repay the funder. In fact, litigation funding is provided on a non-recourse basis. If the case is not successful, funders lose any monies deployed.
There is confusion as to what TPLF can be used for—and whether it must be used exclusively for paying lawyers. In fact, funding dollars can be applied to operating budgets, to cover case research, consulting, or expert fees, and can even be used to cover personal expenses as plaintiffs wait for their case to resolve.
One of the more pervasive misconceptions about Litigation Finance is that accepting monies will allow funders to make decisions about case strategy or settlements. This is false. Funders cannot influence strategy or settlement amounts, nor can they legally push for a case to end more quickly.
Are all litigation funding documents discoverable, and will that complicate matters? Not really. Even in places where disclosing funding contracts is necessary, exact details are kept sparse. Judges, on the whole, are ruling that funding need only be disclosed when there is a compelling reason to do so—specifically to avoid unnecessary complications.
Finally, some think that using a funder and providing them information about a case negates attorney-client privilege. It doesn’t.
Discerning reality from rumors will go a long way toward ensuring that those seeking funding understand the process, caveats, and benefits.
