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Looks Dubious – The Third Ground to Restrain a Lawyer from Acting

April 5, 2023

Looks Dubious – The Third Ground to Restrain a Lawyer from Acting

The following piece was contributed by Valerie Blacker, commercial litigator focusing on funded litigation, and Amelia Atkinson, litigation and dispute resolution lawyer at Piper Alderman. Strata Voting Pty Ltd (In Liq) v Axios IT Pty Ltd and Anor[1] is a funded single plaintiff action. It involved a recent examination of the Court’s power to prevent a lawyer from acting in proceedings for a conflict of interest. The authors represented Strata Voting in its successful defense of the restraint application. The Third Ground Less frequently invoked than the first and second grounds (misuse of confidential information and breach of fiduciary duty), the third category upon which to restrain a lawyer in a position of conflict from acting in a matter is known as the “inherent jurisdiction” ground. The Court can restrain lawyers from acting in a particular case as an incident of its inherent jurisdiction over its officers and control of its processes.[2] The jurisdiction is enlivened where there is an objective perception that a lawyer lacks independence such that the Court is compelled to interfere and remove the lawyer from acting in the matter. In other words, the position of the lawyer makes the Court uneasy. The test for intervention is whether a fair-minded, reasonably informed member of the public would conclude that the proper administration of justice, including the appearance of justice, requires that a legal practitioner should be prevented from acting.[3] Axios’ failed application The jurisdiction to enjoin a solicitor from acting is to be regarded as exceptional, and to be exercised by the court with caution. That was the basis on which his Honour Judge Dart of the South Australian Supreme Court dismissed the application brought to restrain Piper Alderman from acting for the liquidators. Here, Piper Alderman is acting for the company in relation to a dispute which was in existence before the winding up commenced.  The liquidator retained Piper Alderman to continue acting for the company for the purpose of the litigation, the subject of the existing dispute. The supposed conflict was said to have arisen from a proof of debt which Piper Alderman lodged for about $47,000 in fees incurred prior to the administration. The argument was that Piper Alderman’s impartiality was impaired by the fact that unless the litigation is successful, Piper Alderman will not be paid its outstanding fees because there will be no funds in the winding up to do so. Axios contended that “the conduct of the solicitor was so offensive to common notions of fairness and justice that they should, as officers of the Court, be restrained from acting”. However, his Honour considered the firm’s status as creditor to be unremarkable. Even in a case where a substantial sum (over $830,000) was owed to lawyers by their insolvent client,[4] there was no risk to the proper administration of justice. As everyone knows, solicitors routinely act in matters where they are owed money including conditional costs agreements, risk share arrangements, contingency fee arrangements and agreements that include uplift fees, to name a few. The restraint application in Strata Voting was unsurprisingly and swiftly[5] dismissed with costs. Conclusion If an opposing party asserts that a lawyer should be restrained from acting for the opponent, it is necessary for a clear case to be made that the lawyer is in a position where he is fixed with an interest of such a nature that he may fail in his overriding duty to the court. It requires proof of facts, and not mere speculation as to motive. The risk to the due administration of justice has to be a real one. Otherwise, a litigant ought not to be deprived of the lawyer of his choice. — About the Authors: Valerie Blacker is a commercial litigator focusing on funded litigation. Valerie has been with Piper Alderman for over 12 years. With a background in class actions, Valerie also prosecutes funded commercial litigation claims. Amelia Atkinson is a litigation and dispute resolution lawyer at Piper Alderman with a primary focus on corporate and commercial disputes. Amelia is involved in a number of large, complex matters in jurisdictions across Australia. For queries or comments in relation to this article please contact Amelia Atkinson | T: +61 7 3220 7767 | E:  aatkinson@piperalderman.com.au [1] Unreported, Supreme Court of South Australia, Dart J, 23 January 2023 (Strata Voting). [2] Kallinicos & Anor v Hunt [2005] NSWSC 118 at [76] (Kallinicos). [3] Ibid. [4] Naczek & Dowler [2011] FamCAFC 179, [84]. [5] In a 5-page judgment.

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Institute for Legal Reform Urges EU Clampdown on Litigation Funding

By John Freund |

As debate over third-party litigation funding (TPLF) continues to intensify globally, new pressure is being applied at the European level from business and industry groups calling for tighter oversight. A recent submission from a U.S.-based advocacy organization urges EU policymakers to take coordinated action, framing litigation funding as a growing risk to legal certainty and economic competitiveness across the bloc.

An article from Institute for Legal Reform outlines a formal letter sent to senior EU officials calling for harmonized, EU-wide regulation of third-party litigation funding. The Institute argues that the rapid expansion of TPLF—particularly in collective actions and mass claims—has outpaced existing regulatory frameworks, creating what it characterizes as opportunities for abuse. According to the submission, funders’ economic incentives may distort litigation strategy, encourage speculative claims, and exert undue influence over claimants and counsel.

The letter specifically urges institutions such as the European Commission and the European Parliament to introduce transparency and disclosure requirements around funding arrangements. The Institute also advocates for safeguards addressing funder control, conflicts of interest, and capital adequacy, suggesting that inconsistent national approaches risk regulatory arbitrage. In its view, the EU’s Representative Actions Directive and broader access-to-justice initiatives should not be allowed to become conduits for what it calls “profit-driven litigation.”

The submission reflects a familiar narrative advanced by business groups in the U.S. and Europe, linking litigation funding to rising litigation costs, forum shopping, and pressure on corporate defendants. While the Institute positions its recommendations as pro-consumer and pro-rule-of-law, the letter has already drawn criticism from funding advocates who argue that TPLF improves access to justice and levels the playing field against well-resourced defendants.

Case Developments Commercial

Siltstone Capital Reaches Settlement with Former General Counsel

By John Freund |

Litigation funder Siltstone Capital and its former general counsel, Manmeet “Mani” Walia, have reached a settlement resolving a trade secrets lawsuit that had been pending in Texas state court. The agreement brings an end to a dispute that arose after Walia’s departure from the firm, following allegations that he misused confidential information to establish a competing business in the litigation finance space.

As reported in Law 360, Siltstone filed suit in late 2025, claiming that Walia, who had served as general counsel and was closely involved in the company’s internal operations, improperly accessed and retained proprietary materials after leaving the firm. According to the funder, the information at issue included sensitive business strategies and other confidential data central to Siltstone’s competitive position. The lawsuit asserted claims under Texas trade secrets law, along with allegations of breach of contract and breach of fiduciary duty tied to confidentiality and restrictive covenant provisions.

Walia disputed the allegations as the case moved forward, setting the stage for what appeared to be a hard-fought legal battle between the former employer and its onetime senior executive. However, before the dispute could be fully litigated, the parties opted to reach a negotiated resolution. Following the settlement, Siltstone moved to dismiss the case with prejudice, signaling that the matter has been conclusively resolved and cannot be refiled.

The specific terms of the settlement have not been made public, which is typical in cases involving alleged trade secret misappropriation. While details remain confidential, such resolutions often include mutual releases of claims and provisions aimed at protecting sensitive information going forward.

Commercial People Moves

Burford Capital Makes Strategic Entry into South Korea

By John Freund |

Litigation funder Burford Capital is expanding its footprint in Asia with its first senior hire in South Korea, marking a strategic move into a jurisdiction it sees as increasingly important for complex commercial and arbitration disputes. The firm has appointed Elizabeth J. Shin as Senior Vice President and Head of Korea, with responsibility for leading Burford’s activities in the market and developing relationships with Korean corporates and law firms.

Law.com reports that Shin joins Burford from Lee & Ko, where she was a partner in the firm’s international arbitration and global disputes practice. Her background includes advising on high-value cross-border commercial disputes, intellectual property matters, and arbitration proceedings across a range of industries. Burford has positioned her experience as a key asset as it looks to support Korean companies pursuing claims in international forums and managing the cost and risk of major disputes.

The hire reflects Burford’s view that Korea represents a growing opportunity for legal finance, driven by the country’s sophisticated corporate sector and increasing involvement in international arbitration and complex litigation. By establishing a senior presence on the ground in Seoul, Burford aims to provide local market insight alongside its capital and strategic expertise, while also raising awareness of litigation funding as a tool for dispute management.

Korea has traditionally been a more conservative market for third-party funding compared with jurisdictions such as the US, UK, and Australia, but interest in alternative dispute finance has been gradually increasing. Burford’s move signals confidence that demand will continue to grow, particularly as Korean businesses become more active in global disputes and seek flexible ways to finance large claims.