Third-party litigation financing agreements are now required to be automatically disclosed in all proposed class actions in the Northern District of California. The automatic disclosure rule is the first of its kinds in the United States district courts.
The new rule, which states that “in any proposed class, collective or representative action, the required disclosure includes any person or entity that is funding the prosecution of any claim or counterclaim,” was adopted in a court-wide standing order for all judges in the Northern District of California. Although this is a huge step toward greater transparency in third party financing, the rule is unlikely to impact big players in litigation financing like Burford Capital and Bentham IMF, as they do not typically fund class action cases.
A Burford statement indicated that the new rule may even allow courts to see how common litigation financing in class action lawsuits has become. The new rule is indeed limited—it was adopted after the court previously proposed an even broad requirement of automatic disclosure in all cases.
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Summarized by Meghan Hallinan