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Litigation Funding Enters the “Mainstream”

In an op-ed in Financier Worldwide, U.S. Chamber Institute for Legal Reform President Lisa. A Rickard and Mark Behrens, Partner at Shook, Hardy & Bacon LLP address the staggering growth of third party litigation funding (TPLF) in the U.S. and the recent trends associated with the practice, such as portfolio investments and litigation funding startups.

“Investor groups are pouring unprecedented sums of money into financing litigation in the world’s largest litigation market”, writes Rickard and Behrens.

“Business and civil justice organisations, such as the U.S. Chamber Institute for Legal Reform, believe that third party litigation funding may lead to the filing of speculative, potentially high-yield lawsuits, because litigation funders absorb some of the risk in litigation and can spread it across a portfolio of cases and among investors”.

The article provides suggested TPLF reforms, including the development of procedural rules to require disclosure of TPLF funding. “Courts need to know about the presence of a third party in the litigation to determine how to impose sanctions or other costs”.

Read the full op-ed here.

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N.J. Federal Courts Will Now Require Disclosure of Litigation Funding

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.

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