Alternative Litigation Finance and the Attorney-Client Privilege
50 Pages Posted: 25 May 2014 Last revised: 30 Jun 2015
Date Written: May 23, 2014
The United States legal system has a new player: the alternative litigation finance (ALF) entity. Funding of litigation by an entity that is not a party to the litigation has long existed in the United States in the form of attorney funding through contingent fees and insurer funding through the typical liability insurance contract. In situations in which those two avenues of third-party funding has not been available, parties, large and small, sophisticated and not, often have struggled to fund their own litigation. Today such parties have an additional option: ALF. ALF refers to funding of litigation “by entities other than the parties themselves, their counsel, or other entities with a preexisting contractual relationship with one of the parties.” ALF entities have no interest or involvement in the matter before providing funding but provide funding for the litigation and reap a return if the funded party is successful.
Keywords: alternative litigation finance, ALF, attorney-client privilege, joint clients, common interest
JEL Classification: K12
Suggested Citation: Suggested Citation