November 2011 – Chaffetz Lindsey senior associate Andreas Frischknecht has co-authored an article, together with Vera Schmidt of Umbricht Attorneys at Law in Zurich, discussing privilege and confidentiality considerations in third party funder due diligence for the recent Transnational Dispute Management (TDM) Special Issue on Contingent Fees and Third Party Funding in Investment Arbitration Disputes.
The article takes a comparative approach, examining the principles and considerations governing issues of legal privilege and confidentiality in the United States and Switzerland, respectively. The authors conclude that “as far as the impact of disclosures to a third party funder on any applicable privilege or confidentiality protection is concerned, the differences between the two legal systems are not merely differences in degree but differences in kind.” This may lead to what the title of the article refers to as an “expectations gap” in an international arbitration involving a Swiss and an American party, and the prospect that a party may be taken by surprise should the arbitral tribunal subsequently decide to apply the law of another jurisdiction that affords less protection than the corresponding rules in the party’s home jurisdiction. To avoid such a result, the authors suggest that the tribunal may wish to adopt a “most favored nation” rule (i.e., application of whichever jurisdiction’s rules afford the greatest degree of protection) to determine issues of legal privilege and confidentiality in connection with third party funder due diligence.
Chaffetz Lindsey lawyers have significant experience using alternative sources for funding litigation/arbitration. For more information or if you would like a copy of the article, please contact Chaffetz Lindsey partner James Hosking at firstname.lastname@example.org or Andy at email@example.com.
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