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Litigation Finance and Professional Independence

Submitted by Rosebella Nyonje on Thu,24/07/2014
Long title
Thinking like a Lawyers vs. Thinking like a Banker: Litigation Finance and Professional Independence
Author(s)
Sebok, Anthony J.
Author(s)' contact information
Cardozo Law School, New York, USA
Conference title
International Legal Ethics Conference VI
Conference location
City University London
Country
United States
Year
2014
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Abstract
One major criticism of third party investment in litigation is that it weakens the ability of legal professionals to protect their clients from the influence of non-lawyers providing funds for litigation.
This paper examines this assumption and recommends that it be balanced against clients’ other needs and interests. The paper first describes the special treatment the law provides certain third parties with a financial interest in the outcome of litigation, i.e., lawyers who have a contingent fee and liability insurers.
The paper then asks why investors motivated by “purely” financial interests are more likely to harm the interests of parties in litigation than lawyers and insurers.
At the crux of the paper is an effort to take seriously not only the diverse financial interests of third parties with a stake in the litigation, but also to ask whether a non-lawyer can provide advice that might improve the client’s outcome over the outcomes the client might achieve if advised by only her lawyer.
This involves examining the nature of reasoning rooted in a duty of loyalty and its relative value to different kinds of clients in different kinds of litigation. The paper will conclude by recommending that unless strong countervailing reasons can be identified, certain clients should be permitted to “trade” the protections currently provided to them by the prohibition of champerty and the Model Rule’s protection of professional independence for the advantages inherent in third party funding combined with third party influence.
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