Class Counsel as Litigation Funders

Abstract

In a prior article, William Rubenstein and I explored the theoretical and policy rationales for making cost investment in class actions directly profitable, e.g., by awarding a multiplier on costs - a departure from current practice pursuant to which costs are merely reimbursed. This Article grapples with the doctrinal question of whether such cost profits are permissible. That inquiry traverses three ethical boundary lines which, as currently drawn, fail to fully acknowledge the distinct role played by plaintiffs’ counsel in class actions as litigation funders: the lines between “professional services” and other charges; consent and its absence; and permissible and impermissible conflicts.

Keywords: Ethics, Attorney's Fees, Class Actions, Civil Procedure