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.
The Local Civil Rule 7.1.1 requires disclosures of “any person or entity that is not a party and is providing funding for some or all of the attorneys’ fees and expenses for the litigation on a non-recourse basis.” The rule is a logical extension of current practices across the U.S. and abroad. Nationally, Wisconsin in 2018 and West Virginia in 2019 passed measures imposing disclosure requirements backed by third-party funders in state courts. Internationally, significant regulations have been passed to monitor the litigation funding industry in Australia, Canada, China, New Zealand, the U.K., Singapore, and other countries. Rule 7.1.1 is a positive development, particularly in product liability cases, as it leads to greater transparency for the parties and courts without unduly burdening the parties.