Aspen Claims Service

Litigation Funders Risk Disclosure in Court Rules, GAO Moves

 Friday, September 23, 2022

 Bloomberg Law

Litigation funders risk public disclosure about their role financing lawsuits from a body that sets federal court rules and lawmakers who commissioned a study of their activities.

Lawyers for Civil Justice, a group of defense-side lawyers, are seeking to amend procedures so that plaintiffs would need to disclose financial backing from investors in federal appeals courts.

An existing rule ‘is failing to provide circuit judges any information’ on financing that could pose conflicts, Lawyers for Civil Justice said in its request this month to the Advisory Committee on Appellate Rules.

While corporate defense groups have long pushed for disclosures about litigation finance -- so far, without much success -- this new twist has them arguing that judges need the information to police their own conflicts of interest.

The rule request, one of two pending before judicial bodies, and a Government Accountability Office study pushed by lawmakers, represent new possible avenues of information about the workings of the litigation finance industry.