Will the Real Party in Interest Please Stand Up?

Party of Interest

In the recent decision of Miller UK Ltd and Miller International LTD. (“Miller”) v. Caterpillar, Inc. (“Caterpillar”) out of the United States District Court for the Northern District of Illinois, Defendant Caterpillar attempted to obtain through discovery the funding agreement between Miller and its litigation funder.  Caterpillar argued the funding agreement was relevant to determine who the real party at issue was in the case – Miller or the funder.

Caterpillar contended the litigation funder was a real party in interest on the premise that the Miller/funder relationship was substantially similar to that of a subrogee in an insurance context.  A subrogee is the party that gets the legal right to collect on the claim of another (i.e. subrogor) in exchange for payment of the other’s debts or expenses.  The most common example of a subrogee –subrogor dynamic is that of an insured and an insurance company.  The insurance company will step into the shoes of the insured, pay the insured’s costs or debts, which then gives the insurance company the legal right to seek reimbursement for the amount it paid. 

In Miller, the Court determined that likening a litigation funder to that of a subrogee was a stretch to say the least.  Here the funder did not, nor was it obligated to, pay for any losses sustained by Miller.  Instead, Miller’s litigation funder was contractually obligated to give Miller funds to help with the costs of ongoing litigation against Caterpillar and nothing else.  If Miller were to lose its case against Caterpillar, the funder had no recourse to seek reimbursement for its loss. 

This finding is significant as it effectively does away with the contention that a funder could be considered a “real party in interest” merely because of its presence in a case.  That funders cannot be deemed a real party in interest puts a stop to using this particular argument as an avenue to obtain documents exchanged with a litigation funder through discovery.