In a recent opinion piece, renowned legal scholar David Levitt argues that the disclosure of third-party litigation funding should be made mandatory across all cases. This call to action comes on the back of the Appellate Rules Committee’s decision to defer the issue.
Third-party litigation funding, wherein a third party unconnected to the lawsuit provides capital to a plaintiff involved in litigation in return for a portion of any financial recovery from the lawsuit, has been a growing area of interest in the legal sector. However, its implications for the administration of justice remain under-debated.
Some proponents argue that third-party funding helps to level the playing field, enabling plaintiffs who would not otherwise have the financial resources to pursue litigation to do so. On the other hand, detractors maintain that this practice can potentially skew the legal process, with funders directing litigation strategies and decisions for their own gain.
Levitt, a seasoned practitioner at law firm Hinshaw & Culbertson, emphasises that mandatory disclosure of such funding would be instrumental in ensuring the even-handed administration of justice. According to Levitt, “Despite the Appellate Rules Committee’s deferral, such a mandate is necessary to not just promote transparency but also allow presiding judges to make fully-informed decisions.”
It remains unclear how the ongoing discussions around the issue will pan out, with major questions still looming around the potential implications of such disclosure rules. However, it’s evident that any future developments in this space will have a pivotal role in shaping the landscape of litigation funding and the practice of law more broadly.
For more details on Levitt’s argument and a broader look at this ongoing legal debate, you can read the full piece on Law360.