Some GOP senators have reintroduced a bill that would require plaintiffs in lawsuits to disclose when they have backing from a third-party funder. The Litigation Funding Transparency Act would require disclosure of third-party litigation funding for any Federal class action and any Federal claim that is aggregated into a Federal multi-district litigation within 10 days of a case being filed or 10 days after the closure of the funding deal.
Currently, litigation funding is generally not disclosed to opposing parties involved in the lawsuit.
Supporters say defendants and courts have a right to know about a funder’s potential conflicts of interests and how or if they may influence settlement discussions.
Those against the legislation say it’s only being reintroduced since special interests are ramping up their lobbying efforts and mandatory disclosure would hurt American businesses in the end, since it will add more delays and expenses to lawsuits.