Third-Party Litigation Financing Under The Spotlight: Judicial Conference Subcommittee Formed To Explore Disclosure Rules

Third-party litigation financing is a significant issue in the U.S. legal system, with its use playing an increasingly important role in litigation. Whether a party should be, or is, required to disclose litigation funding from a third party, and the terms of that funding, has been the subject of heated debate for some time. On October 10, 2024, the Judicial Conference's Advisory Committee on Civil Rules agreed to create a subcommittee to evaluate whether new federal rules governing the disclosure of third-party financing should be promulgated. As we discussed in a previous blog post, over the past decade the Advisory Committee has been considering changes to the Federal Rules to include mandatory disclosures related to litigation funding. The Advisory Committee's creation of a dedicated subcommittee to explore the transparency of third-party financing marks a pivotal moment, signaling that this issue is gaining attention after years of debate. The action by the