The U.S. Chamber Institute for Legal Reform and Lawyers for Civil Justice submitted a joint proposal to the Federal Civil Rules Advisory Committee on March 10, seeking a uniform federal rule that would require disclosure of third-party litigation funding in federal civil cases, according to a March 23 statement.
The proposal aims to amend Rule 26(a)(1)(A) of the Federal Rules of Civil Procedure so that parties must disclose nonparty funders with a financial interest in the litigation and produce the underlying agreements at the outset of a case. The organizations say this step is intended to address inconsistencies across federal courts regarding third-party litigation funding disclosures.
"The U.S. Chamber Institute for Legal Reform published a blog post outlining the joint filing it made with Lawyers for Civil Justice on March 10 to the Federal Civil Rules Advisory Committee. The proposal seeks to create a uniform requirement for initial disclosure of third-party litigation funding to address inconsistencies across federal courts. This action builds on existing local rules that some districts have already implemented to handle the issue," according to the U.S. Chamber Institute for Legal Reform.
Recent studies highlight concerns about third-party litigation funding's impact on the economy and legal system. "The Perryman Group reported that third-party litigation funding imposes a 54.2 billion dollar annual drag on the U.S. economy, driven by higher legal costs, increased insurance premiums, and reduced business investment. When including multiplier effects, the total impact affects approximately 454,450 jobs nationwide. These costs are ultimately passed on to consumers and businesses through higher prices and insurance premiums across regions," according to The Perryman Group.
Industry data also show continued growth in this sector: "The third-party litigation funding market saw 2.8 billion dollars in new deal commitments and 346 new deals in 2025, according to Westfleet Advisors. This reflects continued growth in the industry as investors seek returns from civil litigation. The expansion of third-party funding has prompted calls for greater oversight to ensure fairness and efficiency in the civil justice system," according to Westfleet Advisors as reported by American Lawyer.
The U.S. Chamber Institute for Legal Reform describes itself as "the legal reform arm of the U.S. Chamber of Commerce" that advocates for policies promoting economic growth and opportunity while working toward improvements in efficiency and fairness within the civil justice system, according to its official website.
