Lawyers warned to avoid ‘meritless’ crowdfunded litigation

Lawyers warned to avoid 'meritless' crowdfunded litigation

The growth of litigation crowdfunding could lead to ‘inverse SLAPPs’ which appear to funders to be in the public interest but are “simultaneously meritless as a legal matter”, a new report says.

The warning comes in new research published by the Legal Services Board (LSB) in England and Wales last week, which highlights examples of unethical conduct that can undermine the rule of law.

The report, by Professor Richard Moorhead and Professor Steven Vaughan, explores the professional commitment of lawyers to uphold the rule of law, including promoting respect for the law, counselling clients towards legality and helping resolve disputes in the interests of justice.

In a substantial section on strategic lawsuits against public participation — so-called SLAPPs — the report notes that “the danger of externalities from opportunistic use of the legal process [also] extends to legal actions that appear more publicly spirited”.

“Even where the motivations of clients and third-party funders are altruistic, duties to the rule of law necessitate that lawyers exercise independent judgement on them,” it adds.

Other examples given of how lawyers’ conduct can undermine their commitment to the rule of law include discriminating against potential clients; representing likely wrongdoers in a way that supports their continued wrongdoing; repeated silencing of claimants, e.g., through the misuse of non-disclosure agreements; and facilitating ‘creative compliance with the law’.

Commenting on the report, LSB chief executive Matthew Hill said: “This review gives us a greater understanding of the importance of the rule of law in underpinning rules and guidance for the profession, and builds on our evidence base for how the profession can target negative behaviours that can erode public trust and confidence.

“The review findings will support the LSB-led programme of work on professional ethics and the rule of law.

“We will continue to work with stakeholders across the sector, including leaders in the profession, to ensure regulation supports cultures that insist lawyers act with independence, integrity, and honesty in their everyday practice, no matter their client or area of law.”

Professor Moorhead and Professor Vaughan added: “We hope the report serves as a timely reminder that the rule of law depends on the independence and integrity of its regulated practitioners. Professional ethics is central, not subsidiary, to the rule of law and something in which the professions, regulators, courts, business, and the public all share an interest.”

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