Litigation finance: stop the hide-and-seek game
02nd Sep 2016
Lisa A. Rickard, President of the U.S. Chamber Institute for Legal Reform published an op-ed in D&O Diary regarding the disclosure of litigation funding arrangements.
“The most perplexing characteristic of third-party litigation finance is that it typically occurs in secret”, writes Rickard. She notes a class action filed by a group of Nigerian fishermen against Chevron in a San Francisco court, in which Chevron suspected the suit was being sponsored by third-party investors and demanded production of any litigation funding agreements.
“Reluctantly, plaintiffs’ counsel acknowledged that outside financiers were in fact backing the lawsuit”, writes Rickard. “Thereafter, recognizing the legitimacy of Chevron’s request, Judge Susan Illston recently ordered that all funding contracts be produced”.
“We need a probing public debate about when and where litigation financing should be allowed and how it should be regulated”, concludes Rickard, who notes that Congress may take up this issue. “But in the meantime, we should at least know when and where litigation finance is occurring. If, as its supporters urge, such funding is so obviously a positive contributor to our legal system, why must it occur in the shadows? It’s time for third-party litigation finance to come fully into the sunshine”.
Read the full op-ed here.