DeStefano, Alternative Litigation Funders and Claim Holders: A Common Interest or a Common Problem
by Michele DeStefano, Law Professor at LawWithoutWalls and University of Miami School of Law on Apr 24, 2013
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To date, there is little agreement on whether communications and work resulting from the relationship between claim funders, commercial claim holders, and their lawyers should be protected by either ...
To date, there is little agreement on whether communications and work resulting from the relationship between claim funders, commercial claim holders, and their lawyers should be protected by either the attorney-client privilege or work-product doctrine. And there is much debate about whether and how the common interest doctrine might be used to support or deny attorney-client privilege and/or work product doctrine protection in this context. In order to shed light on this debate, this Article reviews and analyzes the case law that exists in the claim funding context and analogizes and compares it to that in other areas such as public relations, patent law, and insurance. Ultimately, it argues that given the reasoning applying exceptions to waiver in other contexts, presumptions that the attorney-client privilege does not apply and that the work product does are misplaced. Claim funders may share a common interest with commercial claim holders and both the attorney-client privilege and work product doctrine should from a normative and theoretical standpoint apply in some (but not all) situations. That said, given the sensitive issues involved with and arguments against claim funding, and the precariousness of both privilege doctrines, it predicts, that, in practice, privilege protection will not be effectuated to the degree with which the doctrine might support. This is because the issues involved with and arguments against claim funding are common ones used by the ABA and other entities as stopgaps to prevent infringement on the sanctity of the lawyer-client relationship, the reputation of the profession, and lawyers’ monopoly of legal and law-related services. As in the other contexts, (like public relations), if courts view claim funding as a threat to the independence of the lawyer or something that degrades the profession or eats away at lawyers’ monopoly, they have the ability (under the doctrine) to deny protection of the communications. Thus, the article concludes with some advice to claimholders, lawyers, and claim funders for how to navigate the current (and future) unpredictable privilege landscape.
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