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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.

The rule adopted earlier this week will require any party getting non-recourse funding for litigation to disclose the funder’s identity, whether the funder’s approval is needed for litigation decisions or settlement, and a brief description of the funder’s financial interest in the case. The adopted local rules amendment requires disclosing litigation funding in any case pending in the District of New Jersey. The new rule can be found HERE.

The rule change goes into effect in 45 days.

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