Behrens: Reforms, Disclosure Needed for Third-Party Litigation Funding

As large-scale, third-party litigation funding (TPLF) surges in the United States, courts and legislatures should require mandatory disclosure of TPLF agreements and adopt additional reforms, Shook Public Policy Practice Group Co-Chair Mark Behrens argues in an article for the Fall 2024 issue of the Cornell Journal of Law and Public Policy titled “Third Party Litigation Funding: A Call for Disclosure and Other Reforms to Address the Stealthy Financial Product That is Transforming the Civil Justice System.”

In the article, Behrens said TPLF is fundamentally changing the civil justice environment in the United States, and raises several public policy concerns. He asserted that it fuels speculative lawsuits, prolongs litigation and raises costs, and also poses ethical concerns for lawyers. Behrens noted that typically, TPLF arrangements are rarely disclosed. Behrens suggests key elements for reform, including disclosure of TPLF agreements to the court and parties. 

“In any civil action, a party or party’s attorney should be required to disclose to the court and the parties any agreement in which a non-party agrees to fund some or all of the party’s attorneys’ fees, costs, or expenses in exchange for a contingent right to receive payment out of any settlement, judgment, or award the party may receive in a civil action, including as part of a litigation funding portfolio,” he said.  

Read the article in the Cornell Journal for Law and Public Policy >>