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New Ethics Opinion on Litigation Funding Gets It Wrong (New York Law Journal)

New York Law Journal, August 31, 2018

New Ethics Opinion on Litigation Funding Gets It Wrong [commentary]

“The New York City Bar ethics committee (the committee) recently issued Formal Opinion 2018-5: Litigation Funders’ Contingent Interest in Legal Fees (Opinion 2018-5). For the reasons we will set out in this article, Opinion 2018-5 incorrectly interprets New York Rule of Professional Conduct (RPC) 5.4 dealing with lawyer independence, specifically determines to be unethical activities far less intrusive on lawyer independence than many lending practices that have been accepted and used by almost every law firm for decades, and drives a wedge between settled New York case law and—if the committee’s interpretation of RPC 5.4 were correct—the ethics rules. Based on our conclusions, we call on the committee to withdraw Opinion 2018-5 for reconsideration, and suggest that before it again sees the light of day the committee should engage in an extensive process of consultation that would include litigation funders and the wider profession.”

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