These Ethics Guidelines for US-based Litigation Finance companies are inspired by a similar Code of Conduct published by the Civil Justice Council – an agency of the UK’s Ministry of Justice – in November 2011.
Direct and transparent capital
Members of the CLFA must have direct access to capital immediately within its control, including within a corporate parent or subsidiary. All CLFA companies must be direct funders and not brokers.
Control of claim
CLFA guidelines do not allow funders to take control of litigation or have veto power over settlement negotiations. Funders are also barred from giving legal advice and from causing litigation counsel to act in breach of their professional duties. Because of their interest in the litigation, funders may ask to be kept informed of the progress of the case.
Privilege and protection
While litigation funding agreements are generally protected under Attorney Work Product doctrine, CLFA members must ensure that all sensitive information is protected to the best of their ability with non-disclosure agreements and other protective measures.
CLFA members must also hold litigation counsel ethics in first priority. They agree that they will not offer or pay commissions or referral fees to any attorney or employee of a law firm for referring their clients to the funder.