New White Paper From Westfleet Advisors Finds that Despite Aggressive Disclosure Efforts, U.S. Courts Continue to Protect Confidentiality of Litigation Funding

NASHVILLE, Tenn.–(BUSINESS WIRE)–Despite dozens of attempts by defense counsel in recent years to compel the disclosure of information from plaintiffs regarding the funding of their lawsuits, the vast majority of U.S. courts have ruled that such information should be kept confidential. A new analysis of all known U.S. court decisions through July 2021 by leading litigation finance advisory firm, Westfleet Advisors, found that courts have broadly rejected efforts by parties in litigation to obtain information and documents about their opponents’ litigation funding. This continues a trend observed for the last few years.

Westfleet’s findings are detailed in the Third Edition of its white paper, “Litigation Funding and Confidentiality: A Comprehensive Analysis of Current Case Law,” which analyzes 52 reported trial court decisions through July 2021, addressing discovery attempts seeking either litigation funding agreements or communications with funders by funded parties or their counsel. In 43 of the 52 cases (83%), the courts denied any significant discovery or allowed discovery only on a redacted basis, protecting work product information.

From the first of these surveys in Spring 2018, through the most recent, the number of reported trial court decisions has grown from 30 to 52. In 2018, 24 of the 30 reported decisions (80%) denied any significant discovery or allowed discovery only on a redacted basis, protecting work product information. While the number of courts publishing decisions on this subject has grown substantially, the fact that courts overwhelmingly rule to protect work product information concerning funding remains unchanged.

“We began conducting this analysis to counteract misleading anecdotal information that was being spread, which suggested that there was no consistency in how courts ruled on the protection of confidential funding information,” said Charles Agee, CEO of Westfleet Advisors and co-author of the white paper. “From our first analysis of this topic, through this most recent work, we have found that, despite a significant amount of rhetoric to the contrary, that’s simply not true.”

Mr. Agee wrote the white paper with co-authors Lucian T. Pera, a partner at law firm Adams and Reese LLP, and Alex Agee, an attorney with Bass, Berry & Sims PLC.

“What we learned when we started reviewing the actual decisions in 2018, and it’s still true today, is that, by and large, courts get it,” Pera said “They require that any discovery of litigation funding be relevant to the case and, more importantly, they understand how to protect confidential work product information about funding, just as they know how to protect other confidential work product information.”

Alex Agee added: “One of the primary takeaways from this analysis is that unless a court has specific rules requiring disclosure about funding, the normal protection provided to work product information also applies to protect most litigation funding information.”

There are clear takeaways, the authors noted. “Lawyers specifically should understand that whether they represent funded parties or their opponents, courts are mostly likely going to apply ordinary discovery principles about relevance and discoverability, and about work product protection, to efforts to probe litigation funding arrangements.” Charles Agee also observed, “Court are not going to be spooked by some concern that litigation funding is strange or outside the normal rules of discovery.”

About Westfleet Advisors

Founded in 2013, Westfleet Advisors is the leading litigation finance advisory firm. Our mission is to bring greater transparency and efficiency to litigation finance by equipping lawyers and their clients with superior expertise and resources, enabling them to more successfully navigate the litigation finance market. Our senior leadership has been active in the litigation finance industry since 1998.

Contacts

Jason Milch

jmilch@baretzbrunelle.com
312-379-9406