Third-party litigation funding has received increased scrutiny over the past several years, particularly in the context of mass torts, class actions, and multidistrict litigation. Most of this scrutiny has focused on pre-litigation or pre-resolution commercial loans to fund the litigation, and particularly whether parties are required to disclose such funding during the course of the litigation.

For example, in February 2019, several U.S. senators reintroduced S.471, the Litigation Funding Transparency Act of 2019, which would require plaintiffs to disclose third-party litigation funding for class actions and multidistrict litigation. This came on the heels of a January 2019 letter from more than 25 major U.S. companies to the Committee on Rules of Practice and Procedure requesting an amendment to Federal Rule of Civil Procedure 26(a)(1)(A) “to require in civil actions the disclosure of agreements giving a non-party or non-counsel the contingent right to receive compensation from proceeds of the litigation.”

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