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Legal & Ethical Issues in Financing a Commercial Lawsuit: Borrowing From Peter to Sue Paul

Length: 2 hours 35 minutes

The “American Rule” that each party bears its own court costs has long presented a barrier to complex commercial litigation that only the well-heeled could surmount. The growth of alternative litigation funding, using lending from outside financiers, has started to take hold as a market solution to the age-old problem. Now, complex commercial cases involving blue chip companies, even entire portfolios of litigated claims, may well be financed by and collateralized to a commercial lender. This new means of financing commercial litigation raises new issues. How does the lender obtain and perfect a secured interest in the litigated claim under UCC Article 9, and establish priority over other creditors? How can the lien be enforced? Can the secured interest be sold or transferred? Do litigation finance agreements violate the rule against “maintenance and champerty?” Can the lender obtain information without jeopardizing the client’s claims of privilege? This program will examine these issues and recent decisions, statutes and rules impacting commercial litigation financing, including practical and financial aspects arising from collateralization of litigation claims. The course includes an ethics credit as well.

Who Should Attend:  Litigators, commercial practitioners involved in securitizing assets that may include litigated claims and banking lawyers.  

Program Chair: Robert E. Wood, Seward & Kissel LLP

CLE credit: New York: 3.0 total: 1.0 skills & 2.0 ethics; New Jersey: 3.1 total: 1.0 general & 2.1 ethics; California & Pennsylvania: 2.5 total: 1.0 general & 1.5 ethics.     

Agenda

6:00 – 6:05 p.m. Introduction & Overview of Program
            Robert E. Wood

6:05 – 6:45 p.m. Legal Lending, Financing, Funding & Investing –Legal & Ethical Issues from the Funder’s Perspective
How it works, what’s available, what it looks like, individual plaintiff vs. divorce vs. class vs. commercial, etc., ethical concerns and constraints, regulatory framework, privilege, confidentiality, conflicts, control, involvement, funder liability, duty to know, duty to advise, lawsuits, Spitzer agreement, proposed legislation, social policy, etc.
            Harvey R. Hirschfeld, Selvyn Seidel & Aviva O. Will

6:45 – 6:50 p.m. Break

6:50 – 7:10 p.m. Funder’s Perspective (continued)
When to use various types of funding, how third party funding impacts tactics and strategy, privilege, confidentiality & the lender’s involvement & liability
            Harvey R. Hirschfeld, Selvyn Seidel & Aviva O. Will

7:10 – 7:20 p.m. Panel Questions & Answers

7:20 – 7:25 p.m. Break

7:25 – 8:00 p.m. Litigation Funding – View from the Counsel’s Table
A view of the practical, tactical, ethical, legal, regulatory, legislative and social issues from the viewpoint of the practitioner/professional/ethicist.
                     Professor Anthony Sebok

8:00 – 8:05 p.m. Break

8:05 – 8:15 p.m. Panel Questions & Answers

8:15 – 8:20 p.m. Break

8:20 – 8:50 p.m. Securing, Collecting & Alienating the Collateral
                       Sandra Stern                

8:50 – 9:00 p.m. Final Questions & Answers Session    
            Panel                                  


Original Recording Date: 2/5/2015


Produced By:

New York City Bar Association

Course Materials

  • *Legal & Ethical Issues in Financing a Commercial Lawsuit
  • Affirmation of Self-Study