LAWYERS FOR CIVIL JUSTICE
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​Disclose Third Party Litigation Funders   


LCJ urges the Civil Rules Advisory Committee to adopt an amendment to Rule 26(a)(1)(A) to require disclosure of third-party investments in litigation (“TPLF”) at the outset of a lawsuit.  TPLF occurs when a person or entity with no other connection to a lawsuit (usually a specialized investment company) acquires a right to an outcome-contingent payment from any proceeds produced by the case.  Typically, the TPLF investor obtains that right by paying money to the plaintiff (or plaintiff’s counsel).  In many instances, that money is used to finance prosecution of the case (e.g., discovery costs, attorneys’ fees, expert witness expenses).  Often, plaintiff’s counsel takes the lead in securing the third-party investment; in addition, they sometimes receive the money and agree to make the specified outcome-contingent payment to the TPLF investor from their fee recovery. 

LCJ supports and has partnered with the U.S. Chamber Institute for Legal Reform, a leader on this issue, to ensure that the federal rules require that TPLF be transparent.  Please take a look at this letter signed jointly with ILR urging the Civil Rules Advisory to require disclosure of TPLF at the onset of litigation for more details.

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In November of 2017, the Advisory Committee on Civil Rules voted to form a subcommittee to examine the need for disclosure of TPLF agreements. The Committee’s decision is an important step forward. This was the third time the Committee considered a TPLF disclosure requirement proposal, and on both previous occasions the Committee tabled the proposal. It is important that the new subcommittee will gather information about TPLF in conjunction with its effort to understand the ways in which amendments to the FRCP could provide the same protections to parties to MDL cases that the FRCP provide in all other cases. 

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ORDERS and rules requiring TPLF disclosure


The ​Northern District of California has a standing order for all judges that requires disclosure of TPLF in class actions.  In particular, the order now requires that  “in any proposed class, collective, or representative action, the required disclosure includes any person or entity that is funding the prosecution of any claim or counterclaim.”  You may view the order here.  

The judge overseeing the opioid MDL issued this order requiring disclosure of all third party funding in that matter.

Effective July 1, 2018, Wisconsin state courts will mandate disclosure of third party financing agreements.  View an in-depth analysis of the new statue by LCJ member firm Bowman and Brooke here.


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articles


​Third Party Litigation Funding:  Civil Justice and the Need for Transparency


Third Party Litigation Funding Enters Mainstream

How Profiteers Coax Women Into Surgery

​Federal Rules Advisory Panel to Eye Litigation Financing—Sort Of

Practices May Reduce Payouts in N.F.L. Concussion Settlement

Litigation Funding Isn't Just For The Little Guy Anymore


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motions


​Motion to Compel Disclosure of Non-Interested Parties
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Motion to Compel Disclosure of Third Party Litigation Funding


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Letters


​LCJ Letter to the Advisory Committee on Civil Rules in Support of Pilot Project on Disclosure of TPLF

September 30, 2021
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​LCJ Letter to the U.S. District Court for the District of New Jersey (DNJ) Re: Proposed Local Civil Rule 7.1.1.

May 21, 2021

​Three Steps to Facilitate Consideration of Proposal 17-CV-O to Require Disclosure of Third-Party Litigation Funding

December 21, 2020
With LCJ and ILR

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MEDIA AND PRESS RELEASES

LCJ, ILR Urge Advisory Committee on Civil Rules to Shine Light On Third-Party Litigation Funding - January 11, 2021
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RESOURCES
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For more information about this topic, please click below:

Third Party Litigation Funding Letter to Advisory Committee, March 26, 2019

Third Party Litigation Funding Resources

Institute for Legal Reform Resources 
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  • About Us
    • Who We Are >
      • Corporate Members
      • Law Firm Members
      • Defense Bar Organization Members
      • Board of Directors
      • Staff
    • LCJ Civil Justice Fellows Program
    • LCJ Annual Report
    • JOIN LCJ
    • Contact LCJ
  • Our Initiatives
    • Fix and Follow Federal Rule of Evidence 702
    • MODERNIZE PRIVILEGE LOG REQUIREMENTS
    • Protect the Right to Seal Proprietary and Confidential Information
    • Rules for MDLs
    • Disclose Third Party Litigation Funding
    • "Requester Pays" Discovery
    • Preserve Judicial Independence
    • Fix Rule 30(B)(6)
  • Amicus Briefs
  • LCJ In the News
  • Membership Meetings & Resources
    • LCJ December 2022 Meeting
    • Photo Gallery May 2022 Membership Meeting
    • LCJ CALENDAR
    • Member Login
    • MEMBERSHIP MEETINGS