
New Jersey Rule on Litigation Funding Should Be Welcomed
As reported by Law360, the U.S. District Court for the District of New Jersey recently enacted a rule to increase transparency in the litigation funding industry.
As reported by Law360, the U.S. District Court for the District of New Jersey recently enacted a rule to increase transparency in the litigation funding industry.
One of the major problems with litigation funding is the near-total lack of transparency around funding agreements, which may allow funders to structure agreements in a way that gives them more control of decisions related to the litigation. An effective solution to this problem, according to Sastre, would be the disclosure of the funding agreements themselves.
There is a Chinese Proverb that says, “never do anything that you want to remain a secret.” Now, thanks to a new rule amendment adopted by the U.S. District Court for the District of New Jersey, this proverb also applies to litigation funders in federal court in the Garden State. New Jersey’s decision is a significant victory in the fight to bring transparency to a multibillion industry that operates in the shadows.
Three U.S. Senators have introduced a bill that would require transparency in third party funding in class action and multi-district litigation. It takes aim both at litigation funding and lawsuit lending, in which lending firms offer plaintiffs loans with “up-front” cash that usually come with sky-high interest rates.
New York State Senator Rob Ortt has sponsored S03911A, which would cap the interest rate for the consumer litigation lending industry at 16 percent, which is New York’s civil usury cap, writes the New York Law Journal.
A recent conference in New York city attracted “a few dozen litigation funders, would-be investors and lawyers [who] scoped each other out…looking to make friends—and deals—to put private investment behind legal claims” writes Law360.
A recent article by Yves Faguy in the Canadian Bar Association’s magazine highlights the need for transparency in the litigation funding industry. The article shows the growth of the industry and the increasing prominence of litigation funding on a global stage citing the use of funding in major cases in the UK, Germany, and US.
By Lisa A. Rickard, President, U.S. Chamber Institute for Legal Reform
A new study by the U.S. Chamber Institute for Legal Reform (ILR) has found that collective actions—a legal mechanism that pools claimants to litigate for injunctive relief and/or compensation—are a growing business in Europe. ILR’s study, which analyzes collective redress developments in ten EU Member States, shows that claimants are using a surprising number of recently introduced collective redress systems, with the value and volume of claims being filed on the rise.
Australia-based third party litigation funder Bentham IMF is expanding to Texas, and has hired Eric Chenoweth, a seasoned commercial and intellectual property litigator, to lead its Houston office.
By: Scévole de Cazotte
Despite their publicly stated concerns over the future of the European market, Elliot Management, an American hedge fund, has not shied away from investing in Europe – or at least in their litigation.
This website uses cookies to ensure you get the best experience on our website. Read More