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7 May 2018

Jef Feeley, Andrew M Harris, Bloomberg (USA)

Opioid litigation-funding deals are up for federal judge's review

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The judge overseeing more than 600 lawsuits targeting opioid makers is demanding local governments’ lawyers turn over information about any litigation-funding agreements and provide assurance that lenders won’t gain control over legal strategy or settlements.  U.S. District Judge Dan Polster...issued the order...saying he wants to ensure the agreements don’t create conflicts of interest by affecting plaintiffs lawyers’ judgments in pursuing cases against opioid makers, such as Purdue Pharma LLP and Johnson & Johnson, and distributors such as McKesson Corp. and Cardinal Health Inc.  It would be improper for such financing agreements to give lenders “any control over litigation strategy or settlement decisions,’’ Polster said in the order.  At least two litigation-funding firms have ties to lawyers driving the opioid cases.  Such firms provide financing for what may be costly litigation in return for sharing in a verdict or settlement...Polster-ordered settlement talks between pharma companies and local governments continue while both sides prepare for the first trial next year.  State attorneys general also are holding separate settlement negotiations...Polster...wants to know details of any lending arrangements, and he requested sworn statements from the lawyers and lenders that there won’t be any conflicts of interest and that the lenders won’t have control over strategy, advocacy or settlement decisions...