Are Litigation Funder Communications Protected by the AttorneyClient Privilege and Work Product Doctrine?Maja Zerjal, Associate, and Jeramy Webb,1 Associate, Proskauer Rose LLP, New York and Chicago, USA
Communications between a party and its counsel and documents related to a litigation are generally subject to the attorney-client privilege, the work product doctrine, or both. If an adversary issues discovery on the party requesting communications or documents, the party is never required to do so if the communication is privileged and only rarely in cases concerning work product. But if a party waives or destroys these protections by disclosing them to third parties, the communications or documents must be produced for the adversary, revealing their contents to unintended eyes and likely divulging sensitive materials, such as case strategy or legal theories. Maintaining privilege or protection is, therefore, critical, but in modern litigation, parties and their attorneys may decide to involve third parties in their effort to bring a case from complaint to judgment. Under these circumstances, courts have developed rules and tests for determining if and when parties forego their rights to privilege and protection.
A third party that often plays a significant role when litigation becomes prohibitively expensive or results in duplicative efforts across multiple parties are litigation funders. In the context of their engagement, litigation funders may receive privileged communication. A recent case in the United States Bankruptcy Court for the Southern District of Florida dealt with this developing area of the law in the context of a litigant providing documents to its litigation funder.
II. Background & facts
Mohammad Al-Saleh ('Al-Saleh'), a Jordanian citizen, worked with International Oil Trading Co. ('International Oil') to transport fuel into Iraq on behalf of the U.S. military. The partnership fell apart and Al-Saleh hired Burford Capital, LLC ('Burford') as his litigation funder in his claim against International Oil. In 2011, Al-Saleh won a judgment against International Oil, the debtor, which he was unable to collect. Accordingly, AlSaleh filed an involuntary bankruptcy petition against International Oil on 26 June 2015. The instant case centred on International Oilís third motion to compel discovery (the 'Third Motion to Compel'). The request concerned the transfer of funds (the 'Funding Agreement') and exchange of written communications (the 'Burford Communications') between Al-Saleh and Burford. Al-Saleh objected to the request citing the attorney-client privilege, specifically the common interest exception, and work product doctrine.