Does Sharing Your Case File With a Lawsuit Funding Company Waive Privilege?

By Michael Shemtoub, trial attorney, Beverly Law. Updated November 2026.

What a funding company asks to see

A funder is paid only if your case brings in money, so it studies the case before it decides. The U.S. Government Accountability Office reported that consumer funders look at factors such as whether the defendant’s liability has been established and whether the defendant has insurance. To judge those things, a funder may ask for items such as the accident or police report, medical records and bills, insurance information, and a status update or opinion from your lawyer.

Some of that is ordinary evidence the other side will see anyway. Some of it is not: your lawyer’s view of the case’s strengths and weaknesses, settlement numbers, emails between you and your lawyer, and notes written for the lawsuit. That second group is what privilege law protects, and sharing it is where the risk sits.

Privilege and work product in plain terms

The attorney-client privilege covers confidential communications between you and your lawyer made to get legal advice. Telling a third party about them can waive the protection. Work product is a separate shield for material prepared for litigation, such as your lawyer’s analysis, damage estimates and strategy notes. It is harder to lose. The State Bar of California’s Formal Opinion 2020-204 explains that courts generally find work product waived when a disclosure “substantially increase[s] the possibility that an opposing party will obtain the information.” The same opinion notes that courts “have split on the issue” of protecting what is shared with funders.

What courts have decided

These are the decisions most often cited on the question. None comes from a state supreme court, and judges in other courts can rule differently.

Two lessons run through these cases. A confidentiality agreement with the funder made a real difference, and lawyer-client communications were the most exposed. Doe also shows that the defense may ask about funding in an injury case, and that a court can treat some of it as relevant. Survivors weighing funding can read more on the sexual abuse case page.

California’s rule since January 1, 2026

California’s Consumer Legal Funding Act added Bus. & Prof. Code 6256(c), effective January 1, 2026. It says a retained attorney “shall not disclose any privileged information to a legal funding company without the written consent of the consumer,” and that “disclosing information to a legal funding company at the consumer’s request shall not otherwise void the attorney-client privilege.” A lawyer who violates the section can be disciplined by the State Bar.

The statute gives California consumers more protection than the case law above, with two limits. We found no appellate decision applying it yet. And under Federal Rule of Evidence 501, a federal court applies federal privilege law unless state law supplies the rule of decision for the claim, so California’s statute may not control in every federal case. Formal Opinion 2020-204 adds that a California lawyer needs the client’s informed written consent before sharing confidential information with a funder, after explaining the risks, and that a nondisclosure agreement and confidentiality labels “will decrease the risk that a court will find that work product is waived.”

When the funding contract itself must be disclosed

Keeping the file private is one question. Keeping the deal private is another. Some states require the contract to be handed over:

• Wisconsin requires a party, without waiting for a discovery request, to give the other parties any agreement giving a non-lawyer a right to payment from the case proceeds (Wis. Stat. 804.01(2)(bg)).
• Montana requires delivery of a litigation financing contract to the other parties, the court and known insurers within 30 days of signing, and makes its existence discoverable (Mont. Code Ann. 31-4-108).
• In federal court in New Jersey, Local Civil Rule 7.1.1.pdf) requires disclosure of non-recourse funding of attorneys’ fees and expenses, a narrower category than a typical consumer advance for living costs.

The laws by state table lists other state rules. A disclosed contract shows the deal’s terms, not your lawyer’s file.

What this means for you

• Let your lawyer handle the exchange. Ask the funder to request information through your lawyer, and do not send anything yourself.
• Ask, before anything is sent, exactly what the funder wants and why. A short case summary may be enough.
• Ask for a written confidentiality agreement covering anything shared.
• Keep emails and texts between you and your lawyer out of the package.
• Ask how the funder stores your medical records and who inside the company can see them.
• In California, expect your lawyer to ask for your written consent first. Read whether your lawyer has to sign the funding contract for the lawyer’s other duties.

Sharing information is different from giving up decisions about your case; see can a funding company control my case, the contract red flags page, and the section overview on cash advances on a lawsuit.

Common questions

Related pages

Cash advance on a lawsuit · Laws by state · Injury law FAQs

Important: This page is general information, not legal or medical advice, and reading it does not create an attorney-client relationship. Every case is different; talk to a lawyer about yours. Texas cases are handled by the firm’s Texas-licensed attorneys, Joyce Ondich and John Efstathiou. Last reviewed: November 7, 2026.