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Key Takeaways
While the Committee continues to assess the feasibility and framework of a new federal rule governing TPLF, some courts have begun addressing the issue in their decisions and requiring disclosure of these types of arrangements.
During its semi-annual meeting on October 24, 2025, the U.S. Judicial Conference's Advisory Committee on Civil Rules ("Committee") agreed to continue studyingwhether a new federal rule should mandate the disclosure of third-party litigation funding ("TPLF"). This decision follows a year of stakeholder input to a TPLF subcommittee formed in October 2024 after more than 120 companies urged the Committee to address TPLF agreements, as previously reported in Re:Torts.
According to the U.S. Government Accountability Office, TPLF has grown into a multi-billion-dollar industry over the past few years, with no signs of slowing down. Critics say financing arrangements may impact settlement dynamics and hide the extent of the financed party's monetary resources. Proponents argue that TPLF benefits parties who otherwise would not have the funds to litigate.
Although no specific proposal is before the Committee, the October 24 meeting agenda raised several questions such as how a TPLF rule would define covered arrangements; what information would have to be disclosed (for example, the names of investors); whether any rule would apply universally or only in certain cases; as well as application to foreign actors, financial thresholds, and/or expanded discovery requirements. The Committee will revisit TPLF when it reconvenes in April 2026.
In the meantime, some courts are addressing TPLF in ongoing litigation. For instance, the magistrate judge in the Uber multidistrict litigation orderedplaintiffs' counsel to comply with Northern District of California Local Rule 3-15 and disclose any TPLF from a provider with a financial interest in the outcome of the litigation. The judge did not require counsel to affirmatively deny any TPLF connections, but warned that failing to disclose qualifying arrangements could result in sanctions.
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