Our legal system has long recognized that candid communication between client and counsel is essential to the fair administration of justice.

The U.S. Supreme Court has recognized that the attorney-client privilege has a noble purpose—“to encourage full and frank communication between attorneys and their clients, and thereby promote broader public interests in the observance of law and administration of justice.” 

The same is true of the work product doctrine: the Supreme Court has recognized that it protects against “unwarranted inquiries into the files and the mental impressions of an attorney,” and that “the interests of the clients and the cause of justice would be poorly served” if the work-product doctrine were violated.

These doctrines exist for a simple reason. Clients must be able to share complete and unvarnished information with their legal representatives in order to receive sound advice and effective representation. Attorney–client privilege and work-product protection are the legal mechanisms that make that possible.

Extending Confidentiality to Litigation Funding

As litigation finance has become a more established feature of the civil justice system, courts have increasingly recognized that communications between litigants and litigation funders warrant similar protection from disclosure.

Courts have generally rejected attempts to obtain discovery into communications between funded parties and their capital providers, recognizing that confidentiality is essential to securing the resources necessary to retain top-tier counsel and prosecute complex claims. In this way, confidentiality in the funding process serves the same systemic function as privilege itself: it preserves access to justice.

The Critical First Step: Non-Disclosure Agreements

The foundation for protecting confidentiality in the funding process is laid at the very beginning of the relationship.

Before any substantive information is exchanged, claimholders and prospective funders should enter into a non-disclosure agreement (NDA). An NDA establishes clear ground rules for how sensitive information will be treated and helps ensure that communications made during diligence do not later become targets of discovery.

NDAs promote precisely the “full and frank communication” the Supreme Court has deemed essential to effective legal representation. They allow parties to speak openly while reducing the risk that defendants will later argue—often opportunistically—that confidentiality has been waived.

Key Components of an Effective NDA:

1. A Precise Definition of “Confidential Information”

At the core of any NDA is a clear definition of what constitutes confidential information.

Most litigation finance NDAs are mutual, protecting information shared by both the claimholder and the funder. They may be limited to a single matter or drafted broadly to cover multiple cases under evaluation.

Information shared under NDAs typically include:

• Case theory and legal analysis

• Evidence and documentation

• Financial models and damage calculations

• Settlement discussions and valuation

• Funding terms and negotiations

NDAs also typically exclude information that is already public or independently known to the receiving party.

2. Information Sharing Protocols.

Effective NDAs address how confidential information may be shared in the ordinary course of diligence.

They usually permit disclosure to affiliated entities, outside diligence counsel, and potential investors—provided those recipients are bound by confidentiality obligations at least as protective as those in the NDA itself. This allows funders to conduct thorough diligence without compromising the claimant’s confidentiality interests.

3. Provisions Tailored to the Litigation Context.

Litigation finance NDAs often include provisions that would be unusual in a generic commercial NDA.

For example, they may acknowledge that the parties share a common legal interest in the litigation, reinforcing arguments against waiver. They also typically allow disclosure if required by court order or law. Because of these litigation-specific considerations, experienced funders generally rely on bespoke NDAs rather than off-the-shelf templates.

Moving Forward with Confidence

NDAs rarely require extensive negotiation. In most cases, they reflect a shared understanding that confidentiality is a prerequisite to meaningful engagement—not a point of contention.

When thoughtfully drafted and properly used, NDAs serve as the essential first step in a collaborative process aimed at evaluating risk, allocating capital, and pursuing a fair resolution on the merits.

At Certum, we treat client information with the same seriousness we bring to legal and financial risk. Our approach to litigation finance is grounded in both capital discipline and information security—making us trusted partners throughout the litigation journey.