Rickard & Behrens on the Need for Transparency in 3rd-Party Litigation Funding

Lisa Rickard & Mark Behrens have a piece in Law360 arguing for disclosure regarding 3rd-party litigation funding.  The conclusion:

The U.S. Chamber Institute for Legal Reform and others have urged the Advisory Committee on Civil Rules to adopt an amendment to Rule 26(a)(1)(A) of the Federal Rules of Civil Procedure that would require disclosure of third-party litigation funding at the outset of a lawsuit. So far, the committee has taken a “wait and see” approach. The Catch-22 is that, because third-party funding of lawsuits occurs in secrecy, the proof needed to support reform is elusive.

Federal judges in individual cases, particularly those managing multidistrict litigations, have the power to bring about transparency regarding the presence of third-party litigation funders in their courts. They should make all case management orders provide for the disclosure of third-party litigation funding. This would improve justice in those courts and give the Advisory Committee the data it needs to determine how best to bring third-party litigation funding into the sunlight.