As noted earlier, litigation financing creates myriad conflicts of interest among funder, litigation counsel, and plaintiff. Although the model proposes addressing them in one general way–making the funder a fiduciary of the plaintiff–it also includes several specific provisions aimed at identifing conflicts and enabling the plaintiff to make informed decisions. When considering the disclosed conflicts, weighing the new ones created by the funding contract, and simply evaluating the fairness of the economic bargain, we believe the plaintiff should employ independent counsel. Such counsel is also needed for amendments and assignments of the contract, and for attorney-client privilege issues. We also believe independent counsel can have a role to play in evaluating settlement offers and potential litigation counsel changes. Nonetheless the plaintiff may not feel independent counsel is necessary. As a result, the model includes the following terms:
Independent Counsel: [counsel name] and any successor or supplementary counsel retained by the Plaintiff to advise on this contract’s terms, amendments and assignments, on settlement proposals, and on privilege issues. Such counsel has and shall have no direct or indirect economic relationship with Funder prior to the Conclusion of the Claim.
2.1.5. Fully Informed: the Plaintiff represents that it [and its Independent Counsel] [has/ have reviewed] the disclosures by Funder in Schedules A, B, and C and Plaintiff does not object to the conflicts or potential conflicts described therein.
[2.1.8 Independent Counsel: Plaintiff represents that Independent Counsel advised it about the terms of this Agreement.]
[2.1.8 Advice on this Agreement: Plaintiff represents that, based on the disclosures in schedules A, B and C and Funders’ representations in this Agreement, and based on Plaintiff’s discussion of the schedules and representations with Litigation Counsel, Plaintiff is comfortable relying on Litigation Counsel’s advice regarding the terms of this Agreement and has so relied.]
[3.1.6 Independent Counsel: Plaintiff will obtain Independent Counsel before agreeing to any material amendment to this Agreement.]
The references to Independent Counsel in the context of privilege will be included in the discussion of that issue.