Alternative litigation financing (ALF)--also known as "third-party" litigation financing--refers to provision of capital by parties other than plaintiffs, defendants, their lawyers, or defendants' insurers to support litigation-related activity. This paper describes the ALF industry as of early 2010 and discusses the legal ethics, social morality, and, especially, potential economic effects of ALF.

One of the foundational principles of legal ethics is that the lawyer owes an obligation of undivided loyalty to the client, and no other interests or relationships can be permitted to interfere with the lawyer's exercise of independent professional judgment on behalf of the client. The strongest non-consequentialist doctrinal objection to third-party litigation funding is that it may compromise the lawyer's independence. Yet this argument cannot be made in too strong a form, because lawyers are already permitted to enter into relationships or have interests that present a prima facie risk to the lawyer's independence. In the United States, two such situations are the representation of plaintiffs in contingent-fee financed litigation and the representation of insured defendants by lawyers compensated, and substantially controlled, by liability insurers. Both of these situations present conflicts of interest that are mitigated for the most part not by formal rules of professional conduct but by other legal and non-legal sources of constraint. In the insurance defense context, many apparent conflicts are mitigated by doctrines within insurance law that limit the extent to which insurers can act self-interestedly at the expense of the insured. Regarding contingent-fee representation, market mechanisms are entrusted with the role of regulating the size of fees, while agency and tort principles regulate the conduct of lawyers representing plaintiffs in contingent-fee matters. These comparisons show that third-part litigation finance should not be condemned categorically as compromising the lawyer's independent judgment. Rather, the acceptability of third-party finance should be dependent upon the extent to which the relationship between the funder and the recipient of funding is regulated to mitigate the risk of self-interested behaviour on the part of the funder.Forthcoming in a symposium in the Canadian Business Law Journal on alternative litigation financing.

Since the first edition of this invaluable book in 2012, third-party funding has become more mainstream in international arbitration practice. However, since even the existence of a third-party funding agreement in a dispute is often kept secret, it can be difficult to glean the specifics of successful funding agreements. This welcome book, now updated, expertly reveals the nuances of third-party funding in international arbitration, examines the phenomenon in key jurisdictions, and provides a reliable resource for users and potential users that may wish to tap into and make use of this distinctive funding tool. Focusing on Australia, the United Kingdom, the United States, Germany, the Netherlands, Canada, and South Africa, the authors analyze and assess the legal regime based upon legislation, judicial opinions, ethics opinions, and practitioner anecdotes describing the state of third-party funding in each jurisdiction. In addition to updating summaries of the law of the various jurisdictions, the second edition includes a new chapter addressing third-party funding in investor-state arbitration. Among the issues raised and examined are the following: · payment of adverse costs; · “Before-the-Event” (BTE) and “After-the-Event” (ATE) insurance; · attorney financing: pro bono representation, contingency representation, conditional fee arrangements; · loans; · ethical doctrines affecting the third-party funding industry; · possible future bundling, securitization, and trading of legal claims; · risk that the funder may put its own interests ahead of the client’s interests; and · whether the existence of a funding agreement must or should be disclosed to the decision maker. The second edition also includes discussion of recent institutional developments as they relate to third-party funding, including the work of the ICCA-Queen Mary Task Force on Third-Party Funding and how third-party funding is being incorporated into arbitral rules and investment treaties. Ably providing a thorough understanding of what third-party funding entails and what legal parameters exist, this book will be of compelling interest to parties aiming to take advantage of the high values, speed, reduced evidentiary costs, outcome predictability, industry expertise, and high award enforceability characteristic of the third-party funding arrangements available in international arbitration.

Alternative assets have become popular in recent years, mainly because they offer superior returns and are uncorrelated to traditional markets. Legal finance also called lawsuit funding, lawsuit loans, pre-settlement funding, tort advances, plaintiff advances, litigation finance, litigation financing, litigation funding or dispute finance refers to investments in lawsuits. Written by a renowned expert, this book is essential reading for investors, consumers, lawyers, policymakers, business executives, and anyone who can benefit from having a clear and comprehensive framework for understanding this industry and its capacity to create more balanced and provident legal systems around the world. Join us as we explore this new market and examine the industry s most poignant issues.

The United States judicial system is in the midst of great and fundamental change with regard to the funding of litigation. Historically, parties financed litigation out of their own literal or figurative pockets or, perhaps with the assistance of some sort of contingent fee representation. Third-party financing of litigation was frowned upon, if not specifically forbidden. But, now, third-party litigation funding entities have begun, with much more frequency and success, to provide funding for small matters such as individual personal injury claims as well as larger commercial litigation matters between businesses. The demand for this alternative litigation finance ("ALF") clearly exists, and the supply of funding has developed despite historical obstacles. Doctrines such as champerty have faded somewhat form the legal landscape, and old fears of having litigation funded and controlled by evil actors equal to the worst villain in any Dickens novel have receded in light of the notion that everyone deserves access to justice regardless of bank account balance.

The Model Rules of Professional Conduct provides an up-to-date resource for information on legal ethics. Federal, state and local courts in all jurisdictions look to the Rules for guidance in solving lawyer malpractice cases, disciplinary actions, disqualification issues, sanctions questions and much more. In this volume, black-letter Rules of Professional Conduct are followed by numbered Comments that explain each Rule's purpose and provide suggestions for its practical application. The Rules will help you identify proper conduct in a variety of given situations, review those instances where discretionary action is possible, and define the nature of the relationship between you and your clients, colleagues and the courts.