News & Blog

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.

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.  


More to explore:

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.

U.S. Senators Introduce First-of-its-kind Litigation Funding Transparency Bill

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.




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