“Leading firm rebuked over client account misuse” —

• “Leading transatlantic law firm Womble Bond Dickinson (WBD) has been rebuked for providing a banking facility to a client by receiving and paying out more than £2m that did not relate to any legal work it was doing.”
• “The firm blamed the actions of a single partner for the misconduct.”
• “A regulatory settlement agreement published today by the Solicitors Regulation Authority (SRA) said that WBD acted for a ‘Client A’ in relation to a commercial scheme under which the firm held funds at Client A’s instruction. The money was deposited by three individual clients of Client A who were not WBD clients.”
• “Over a five-year period, the firm ‘allowed payments to be made, on the instruction of Client A and the clients of Client A,’ from this money – in all, around £2.3m.”

“ABA Adopts Best Practices for Third-Party Litigation Finance” —

• “In its first guidance on the booming tool since 2012, the group urged lawyers working with outside funders to be exacting and detail all arrangements in writing. But they stopped short of saying the arrangements should be disclosed to the court.”
• “The American Bar Association’s House of Delegates overwhelmingly voted to approve a new set of best practices for litigation funding arrangements Monday, updating their guidance on the increasingly popular tool for the first time since 2012.”
• “The report, which outlines a list of issues lawyers should consider before entering into agreements with outside funders, cleared the body by a vote of 366 to 10.”
• The report notes:
  • “The litigation should be managed and controlled by the party and the party’s counsel. Limitations on a third-party funder’s involvement in, or direct or indirect control of or input into (or receipt of notice of), either day-to-day or broader litigation management and on all key issues (such as strategy and settlement) should be addressed in the funding agreement.”
  • “Positions on fee splitting, however, are far from unanimous; the New York City Bar Opinion is not the ‘law of the land’ outside of its reach, nor are opinions or approaches that contradict the New York City Bar Opinion,”
  • “A careful lawyer will assure that the written undertakings accurately reflect that the client retains control of the litigation, that disclosures to the funder are limited so as not to create risks of waiver of attorney-client privilege or work product, and that the attorney retains and protects his or her ability to exercise independent professional judgment.”

For other opinion from the funding side of the equation see: “ABA’s new guidance on litigation funding misses the mark” —

• “Unfortunately, the ABA’s new best practices were drafted without a similar opportunity for comment and with the glaring omission of commercial legal finance providers. Not surprisingly, the resulting best practices do not reflect how legal finance actually works and could create confusion among lawyers considering it—the opposite of what was intended.”
• “The ABA attempts to provide a single set of best practices for the funding of disputes between commercial entities and consumer litigation funding, in which funding companies provide individual lawsuit loans to people with personal injury or other individual claims. These are entirely different practices.”
• “Commercial legal finance companies provide multimillion-dollar nonrecourse investments to companies and law firms represented by world-class counsel. Consumer litigation funders make small-dollar cash provisions to individuals in economic distress who may not be experienced in or savvy about negotiating legal transactions. It is as illogical to treat them in the same document as it would be to offer a single set of best practices to cover both investment banking and payday lending.”