Can I share confidential and privileged documents with a litigation funder?

Sometimes, claimants contemplating or involved in litigation are wary about approaching a commercial litigation funder, as they are concerned about sharing information and documents that are confidential and protected by legal professional privilege (“privilege”). However, in order for a funder to perform due diligence on a case, to determine whether or not it is suitable for funding, funders require complete access to all information held by the claimant or the claimant's lawyer that might be relevant to the claim and therefore the funder's decision to provide funding.

In Australia, provided a suitably drafted confidentiality agreement has been executed, confidentiality and privilege over any information and documents provided to the funder will be protected. This is because the claimant and the funder have a mutuality of interest in relation to the claimant’s claims and a common interest in maintaining the confidentiality of any confidential information provided.  As a result, any provision of confidential and privileged information to the funder is the subject of common interest privilege.

If the dispute has a foreign element, it is worth noting that some foreign jurisdictions do not recognise a common interest form of privilege. Also, contractual provisions as to confidentiality may not prevent a defendant from seeking to gain access to documents in the possession of the funder, if they are relevant to the matters in issue. For example, this may be an issue where the documents or information provided to the funder fall within the jurisdictional reach of the courts of the US, which have allowed discovery in aid of international arbitration. If the dispute has a foreign element, and there are potential confidentiality issues with sharing information with a funder, legal advice should be taken. In those cases, it may be that only publicly available or non-privileged information and documents should be provided to the funder.

In any event, applying for litigation funding is straightforward. The process usually involves a claimant or the claimant’s lawyer approaching a funder by phone, email or in person. Normally, a confidentiality agreement is entered into between the funder and the claimant at the outset and/or confidentiality provisions are contained in the funding agreement. The type of information the funder will then require to conduct its due diligence includes the nature and size of the claim, the identity of the defendant, a copy of any legal advice and any documents filed with the court (if proceedings have been commenced) and the amount and nature of the funding sought.

If the funder agrees to fund the claim, then a funding agreement is usually negotiated and entered into between the funder and the claimant. The funding agreement contains the financial terms on which the funder agrees to fund the claim, as well as the parties' other rights and responsibilities in relation to the claim.

If you would like to discuss a potential matter for funding with one of IMF Bentham’s Investment Managers, please contact us by visiting www.imf.com.au/contact for contact details.