Of course. This is a complex and rapidly evolving area of law. Here is a comprehensive overview of litigation funding disclosure requirements, broken down by jurisdiction and context.

Executive Summary

Litigation funding (or third-party litigation funding - TPLF) is the practice where a third party, not involved in the lawsuit, provides capital to a claimant to finance their legal costs in exchange for a portion of the financial recovery. Disclosure requirements refer to the legal obligations to reveal the existence, terms, or identity of such a funder to the opposing party, the court, or a regulatory body.

The central tension is between:

• Transparency & Integrity: Preventing conflicts of interest, ensuring the lawyer's duty to the client is paramount, and managing procedural abuse (e.g., funder control over settlement decisions).


• Confidentiality & Privilege: Protecting the funded party's private financial arrangements and litigation strategy from the opposing side.

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1. United States

In the U.S., disclosure is primarily driven by federal court rules and judicial discretion, with no overarching federal statute.

a) Federal Courts

• The Key Rule: Federal Rule of Civil Procedure 26.


• Discovery is generally limited to matters "relevant to any party's claim or defense." For years, the mere existence of a funding agreement was often deemed irrelevant and protected by attorney-work product doctrine.


• The Trend is Changing: Several influential federal courts have begun requiring disclosure, arguing that funder control or a funder's financial interest in the outcome is relevant to issues of party standing, jurisdiction, and potential conflicts of interest.


• Leading Case Law:


• Miller UK Ltd. v. Caterpillar, Inc. (D. Del. 2016): A landmark case where the court ordered disclosure of the funding agreement, finding it "reasonably calculated to lead to the discovery of admissible evidence" regarding the funder's potential control and the case's real parties in interest.


• Several District Courts, including the Northern District of California, have implemented standing orders that require automatic disclosure of third-party litigation funding in civil cases.

b) Proposed Federal Rule

There have been repeated proposals to amend the Federal Rules of Civil Procedure to mandate disclosure of third-party funding agreements, but none have been adopted yet. The debate continues.

c) State Courts

State approaches vary widely:

• Wisconsin and West Virginia have statutes that explicitly require disclosure of litigation funding agreements.


• Other states have rules or case law that may require disclosure in specific contexts, such as class actions.

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2. United Kingdom

The UK, particularly England and Wales, has a more developed and transparent regulatory approach to litigation funding.

• The Key Regulator: The Civil Justice Council (CJC) and the Commercial Court.


• Disclosure Requirements:


• Commercial Court Guide: Parties in the Commercial Court are required to disclose the existence of a litigation funding agreement and the identity of the funder.


• Security for Costs: This is a critical area. If a defendant can show that a claimant would be unable to pay the defendant's legal costs if the claimant loses, the court can order the claimant to provide security. The presence of a well-funded third-party backer can negate the need for security, but the details of the funding must be disclosed to the court to make this determination.


• Arbitration: While traditionally confidential, there is a growing trend in English-seated international arbitration for tribunals to order disclosure of funding arrangements, especially concerning conflicts of interest (e.g., if an arbitrator has a connection to a funder).

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3. Australia

Australia has one of the most mature litigation funding markets globally, and its disclosure regime is robust, especially in class actions.

• The Key Regulator: The Federal Court of Australia.


• Disclosure Requirements:


• The Federal Court's Class Action Practice Note (GPN-CA) mandates early and comprehensive disclosure of funding agreements.


• Requirements include disclosing the funder's identity, the terms of the agreement (including the commission rate), and any clauses that affect the funder's control over the proceedings (e.g., veto rights over settlements).


• The court must approve the funding commission as "reasonable and fair" before it can be paid from the settlement or judgment proceeds. This makes full disclosure mandatory.

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4. European Union

The EU is moving towards a harmonized approach, though it's not yet fully implemented.

• The Key Instrument: The EU Representative Actions Directive (2020/1828).


• This directive, which must be transposed into national law by member states, applies to representative actions (similar to class actions) brought by qualified entities on behalf of consumers.


• It mandates that member states ensure that qualified entities disclose to the court:


• The source of the funds used to finance the action.


• Whether a third-party funder is involved.


• The nature of the funding agreement (e.g., whether the funder's remuneration is contingent on the success of the action).


• This information must be provided to the court at the start of the proceedings.

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5. International Arbitration

This is a highly contested area with no universal rule.

• The Key Issue: Concerns over conflicts of interest (if an arbitrator has ties to a professional funder) and security for costs are driving the push for disclosure.


• Institutional Rules:


• ICSID Rules (2022): The updated rules explicitly require parties to disclose the name and address of any non-party from which the party has received funds for the pursuit or defense of the proceedings via a direct funding agreement.


• ICC Notes (2016): While not mandatory, the ICC encourages parties to disclose the existence of third-party funders and their identity to assist with arbitrator conflicts checks.


• Tribunal Discretion: Even without specific rules, tribunals often have broad discretion to order disclosure if they believe it is relevant to a specific issue like security for costs or conflicts.

Summary Table of Disclosure Triggers

Jurisdiction/Context	Primary Trigger for Disclosure	What Typically Must Be Disclosed
U.S. Federal Courts	Judicial Discretion / Relevance to Claims	Identity of funder; Terms of agreement (control, fee structure)
UK Commercial Court	Court Rules	Identity of funder; Existence of agreement
Australia (Class Actions)	Court Rules & Fairness	Full funding agreement; Commission rate; Control terms
European Union (Representative Actions)	EU Directive	Source of funds; Identity of funder; Nature of agreement
International Arbitration	Institutional Rules / Tribunal Discretion	Identity of funder (for conflicts); Financial details (for security)

Key Reasons for Requiring Disclosure

• Conflicts of Interest: To ensure the lawyer's professional judgment is not compromised by the funder's financial interests.


• Security for Costs: To allow the opposing party to assess whether it can recover its costs if it wins.


• Jurisdiction and Standing: To identify the real party in interest, which can affect subject-matter jurisdiction in U.S. courts.


• Procedure and Abuse: To prevent funders from driving frivolous litigation or exerting undue influence over settlement decisions.


• Arbitrator Impartiality: In arbitration, to prevent an undisclosed relationship between a funder and an arbitrator.

Conclusion: The global trend is unmistakably moving towards greater transparency and mandatory disclosure of litigation funding, particularly in class actions, commercial litigation, and international arbitration. Parties and funders must be aware of the specific rules in the forum where their case will be heard.