Non-Interference Clause

A non-interference clause in a funding agreement contractually prohibits the funder from directing, controlling, or otherwise interfering with the funded party's litigation strategy, settlement decisions, or choice of counsel. Non-interference provisions are standard in institutional funding agreements and serve two functions: they protect the claimant's autonomy over their own case, and they insulate the funder from champerty and unauthorized practice of law claims that could arise if the funder is deemed to be controlling the litigation. Well-drafted non-interference clauses typically carve out the funder's right to receive information, consent to certain material decisions (such as settlement below a floor amount), and terminate the agreement if specified conditions are met — stopping short of affirmative direction of strategy.

Because a funder deemed to be directing litigation strategy risks both champerty exposure and unauthorized-practice-of-law claims, non-interference language is one of the most carefully negotiated provisions in any agreement — funders want enough information and consent rights to protect their capital without crossing into functional control. The most contested drafting point is typically how broad the funder's settlement-consent rights can be before they function as an effective veto, since courts and ethics authorities in multiple jurisdictions scrutinize exactly that boundary.