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August 27, 2018

ILR’s Rickard: “No Way” to Know How Much Influence Funders Have If They “Remain in the Dark”

In an op-ed for the New York Law Journal, U.S. Chamber Institute for Legal Reform President Lisa A. Rickard said there’s “no way to reliably determine” just how much influence third party litigation funders have over litigation strategy if their arrangements are hidden from public scrutiny.

Rickard pointed to the “notorious” lawsuit against Chevron in Ecuador, in which the funding agreements provided “control to the funders,” including the right to pick “nominated lawyers,” as an example. She found a similar case in Florida in which the court ordered the funder to pay the other side’s legal bills after it was determined that the funder had “veto power over whether the litigation was filed, who would file it” and “the final say over any settlement agreements.”

Without a requirement of transparency, Rickard said “we will remain in the dark” regarding who is actually controlling litigation.  She asked: “Are [litigation funders] really saying that they simply hand their investors’ money over to lawyers and wait around for them to send back huge profits?”

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