Federal Courts in New Jersey May Soon Require Disclosure of Third-Party Litigation Funding
The funding of litigation by third parties has become an increasingly big business. Substantial capital has been invested in litigation finance vehicles. The expanded use of litigation funding has been accompanied by criticism that it may be opportunistic, secretive, and lead to increased litigation. Given the criticism, some have called for more scrutiny in the area.
On April 14, 2021, the United States District Court for the District of New Jersey proposed a new local rule requiring automatic disclosure of information regarding third-party litigation funding. As drafted, the proposed rule may have significant implications for parties seeking alternative sources of funding for disputes. The Court has requested comments by May 21, 2021.
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