Publication Date

3-2014

Journal

Canadian Business Law Journal

Abstract

One of the foundational principles of legal ethics is that the lawyer owes an obligation of undivided loyalty to the client, and no other interests or relationships can be permitted to interfere with the lawyer's exercise of independent professional judgment on behalf of the client. The strongest objections to litigation investment by third parties is that it may compromise a lawyer's independence. This article examines this objection in the context of a recent report from the Ethics Committee of the Commercial and Federal Litigation Section of the New York State Bar Association and argues that it misses the real legal ethics risks posed by litigation investment, which include the risk of self-dealing. The article compares the risk of self-dealing in commercial and consumer litigation investment in the United States with the risk of self-dealing in class action litigation investment in Ontario. It concludes by noting that courts in Ontario have properly identified the self-dealing risk in litigation funding for class actions and suggests that American courts and others concerned with the ethical risks for lawyers created by litigation investment can learn from the Canadian experience.

Volume

55

Issue

1

First Page

111

Last Page

132

Publisher

Carswell; University of Toronto Faculty of Law

Disciplines

Banking and Finance Law | Insurance Law | Law | Legal Ethics and Professional Responsibility | State and Local Government Law | Torts

Comments

Symposium on Third-Party Litigation Funding

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