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Another favorable ruling for legal finance: Pre-litigation funding communications protected by work product doctrine

October 11, 2019
Katharine Wolanyk

Among the most common questions we’re asked by parties that are considering legal finance is this: Will our communications with Burford be protected?

As the courts have affirmed again and again, the answer is yes: Documents exchanged with litigation finance firms such as Burford are protected under the doctrine of work product.

The unbroken streak of courts upholding work product protection continued with last week’s release by Judge Cathy Bissoon of the U.S. District Court for the Western District of Pennsylvania of the redacted version of her decision denying a motion to compel by Seagate and Western Digital Corporation to disclose details of how Lambeth Magnetic Structures is financing its patent infringement case against them.

Judge Bissoon, applying the law of the Third Circuit, held that the plaintiff’s communications with litigation-funding organizations, including the actual litigation funding agreement, were protected by the work product doctrine.  Judge Bissoon found that the communications took place during a three-year period when the plaintiff actually and reasonably foresaw litigation and that “these communications were primarily, perhaps exclusively, for the purpose of preparing for litigation (and) fall within work product immunity.”

The ruling is in line with earlier affirmations of work product protection in litigation finance. Among the most notable of these is Miller UK Ltd. v. Caterpillar Inc., in which the court observed that, because litigants must share documents in order to obtain litigation funding, it would be preposterous to put a litigant to the Hobson’s choice of obtaining capital but sacrificing confidentiality or foregoing capital in order to protect its trial strategy but thereby weakening its ability to prosecute its case.

Although this latest development is entirely consistent with past precedent, it’s noteworthy as a decision in an IP litigation matter. In my leadership of Burford’s IP litigation finance practice, it’s been my experience—especially as clients and counsel are ever more eager to find partners to share risk—that decisions like this provide welcome reassurance in an increasingly challenging climate for IP plaintiffs.

Again, Judge Bissoon’s decision is entirely consistent with a string of decisions over the last few years concerning work product protection in litigation finance. As noted in an interview by Reuters with Professor Maria Glover of Georgetown:

…The “categorical protection” judges have granted to plaintiffs seeking to ward off disclosure of their funding agreements [is] an implicit rejection of the business lobby’s anti-funding campaign. “Judges perceive an attempt to disable people from being able to bring claims,” [Glover] said. The near-consensus among judges that work-product privilege applies “doesn’t happen without strong policy leanings.”

I couldn’t agree more—and while this most recent upholding of work product protection for documents exchanged with litigation finance firms such as Burford is nothing new, it is a welcome reminder of how accepted legal finance has become, and should provide further reassurance to firms and clients considering using it for the first time.