HR1109-119

What This Bill Does

The Litigation Transparency Act adds a third-party beneficiary disclosure rule to title 28. In civil actions, a party or counsel must disclose to the court and named parties the identity of any non-counsel person with a right to receive payment or value contingent on the outcome, and must produce agreements creating that right, including ancillary documents, unless the court orders or parties stipulate otherwise. The bill excludes certain ordinary loans, including principal repayment and interest up to specified thresholds. It is aimed at litigation funding transparency, not banning third-party funding outright.

Who Benefits and How

Judges benefit from knowing whether nonparties have contingent financial rights in civil litigation. Named parties benefit from access to funding agreements that may affect settlement incentives or litigation control. Corporate defendants benefit from earlier visibility into litigation funders and contingent beneficiaries. Court transparency advocates benefit from a uniform disclosure rule for third-party litigation finance.

Who Bears the Burden and How

Litigation funders must expect disclosure of their identity and funding agreements in covered civil actions. Plaintiffs using third-party finance must produce agreements and ancillary documents unless an exception applies. Counsel of record must investigate and disclose contingent payment rights held by non-counsel persons. Courts must manage disputes over exceptions, inspection, copying, stipulations, and protective orders.

Key Provisions

• Requires disclosure of non-counsel third-party beneficiaries with contingent payment rights in civil actions.
• Requires production of agreements and ancillary documents creating those contingent rights.
• Excludes certain ordinary loan repayment rights and capped-interest arrangements.
• Creates transparency for litigation finance without banning third-party funding outright.