A consumer’s CLF contract does not affect the relationship between a consumer and his/her attorney in the consumer’s personal injury claim. As stated above, CLF companies leave the development and disposition of the consumer’s legal claim in the full control of the consumer and his/her attorney. CLF trade organizations acknowledge the importance of the attorney-client relationship and therefore have established industry practices and ethical standards to ensure CLF companies do not impact this special relationship.
Such CLF industry practices and ethical standards are akin to each state’s Rules of Professional Conduct governing lawyers.[i] As part of CLF trade organizations’ rules of conduct, “each member agrees ‘they will not take any steps to: [a]cquire ownership in the consumer’s litigation’ or to ‘[i]nterfere or participate in the consumer’s litigation, and/or attempt to influence the consumer’s litigation.’”[ii]
No Waiver of Attorney-Client Privilege
While some state regulations extend the attorney-client privilege to CLF companies to protect the consumer,[iii] as a standard industry practice, CLF companies neither request nor require privileged information or documents from the consumers or their attorneys.
[i] Jason Lyon, Comment, Revolution in Progress: Third-Party Funding of American Litigation, 58 UCLA L. Rev. 571, 602 (2010).
[i] Id. at 603.
[i] Nebraska Nonrecourse Civil Litigation Act, Neb. Rev. Stat. Ann. § 25-3303 (2012).