The document advocates for a one-year pilot project in selected federal courts to require disclosure of third-party litigation funding (TPLF) arrangements in civil cases, aiming to resolve ongoing disputes about their prevalence, influence, and the need for transparency. The proposal is supported by a coalition of business, legal, and industry organizations, who argue that current rules do not provide sufficient data on TPLF usage or its impact on litigation.
Key issues addressed include uncertainty about how often TPLF is used, whether funders exert control over litigation, and whether existing local disclosure rules are effective. The pilot project would require parties to disclose any agreement where a non-attorney has a right to compensation contingent on the outcome of a lawsuit, allowing the Advisory Committee to gather real-world data and assess the practical effects of such disclosures.
Ultimately, the document contends that a uniform TPLF disclosure rule is necessary for all civil cases, but recommends the pilot project as an intermediate step to inform future rulemaking. The authors believe this approach will clarify definitions, reveal the true extent of funder involvement, and address concerns about burdensome discovery or judicial policy-making, thereby improving transparency and fairness in federal civil litigation.
