Anthony Anastasio, president of the New Jersey Civil Justice Institute (NJCJI), told Federal Newswire in an Aug. 19 statement that NJCJI supports state and federal efforts to require transparency in third-party litigation funding (TPLF) and will continue advocating for it in New Jersey civil lawsuits.
"Given the absence of regulation at the state level, third-party litigation funding arrangements lack transparency, resulting in questions about who is in the driver's seat in litigation and whether there are ethical conflicts for the judges and attorneys involved," said Anastasio. "Accordingly, NJCJI will continue to advocate for disclosure of these arrangements in New Jersey civil litigation. NJCJI supports all efforts at both the state and federal level to mandate disclosure of third-party litigation funding arrangements in civil litigation."
According to the U.S. Chamber of Commerce Institute for Legal Reform (ILR), a lack of disclosure can enable TPLF to encourage the filing of "meritless" lawsuits. Additionally, without transparency, third-party funders can influence the course of litigation.
In 2021, NJCJI submitted a proposal to the New Jersey Supreme Court’s Civil Practice Committee which included a proposed rule to require disclosure of TPLF arrangements, according to a press release from NJCJI. This year, the Committee declined to adopt NJCJI’s proposed rule. The organization said its proposal was based on ethical concerns surrounding the lack of regulation of TPLF at the state level because a lack of transparency can prevent judges from determining whether a conflict of interest or undue influence is taking place.
In July, Congressman Darrell Issa, chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, and the Internet, introduced a discussion draft of the Litigation Transparency Act of 2024, according to a press release. The legislation would require TPLF agreements in civil lawsuits to be disclosed at the onset of the case. "This legislation is a breakthrough measure that will target serious abuses in our litigation system and achieve long-overdue transparency," Issa said. According to the press release, current civil litigation is often funded by commercial lenders, hedge funds, and sovereign wealth funds that operate through shell companies.
During a June Subcommittee on Courts, Intellectual Property, and the Internet hearing, Former Judiciary Committee Chairman Bob Goodlatte said TPLF can create a conflict of interest because parties funding the lawsuit are seeking to make as much money as possible from it. "At times, this may come into conflict with the interests of plaintiffs and prevent plaintiffs and defendants from reaching fair settlements," Goodlatte said. He added that he introduced bills that would require TPLF disclosure while he was in office and that the need for such legislation is more urgent now than ever before.
As president of NJCJI, Anastasio engages in legislative advocacy on various issues affecting New Jersey’s civil justice system. Before joining NJCJI, Anastasio served as Director of Legal and Regulatory Affairs at the New Jersey Coalition of Automotive Retailers. He also practiced law for more than ten years.
