In what we view as a game-changing submission, on September 3, Lawyers for Civil Justice filed a 20-page analysis of no fewer than nine third-party litigation funding (“TPLF”) contracts that, one way or another, have become public.  This analysis rips away the veil of secrecy that has surrounded TPLF, analyzes why and how specific TPLF contract provisions distort litigation in numerous ways, and demonstrates why nothing less than full TPLF disclosure is necessary to prevent abuses and to level the litigation playing field.  It’s titled, “An Examination of TPLF Contracts Reveals Common Control Mechanisms that Can Affect the Litigation Process and Influence Substantive Outcomes − Transparency Doesn’t Impose a Burden; It Lifts a Veil (yes, Bexis’ fingerprints can be found on the LCJ submission).

We highly recommend that anyone interested in TPLF transparency read the entire piece, but here are the main points in bullet form:

• The boilerplate disclaimers of control over litigation decisions found in most TPLF contracts are belied both by other provisions that enable such control and by the actions of funders exercising that control.
• TPLF contracts give the funders the right to stop funding plaintiffs at their sole discretion, thereby giving them effective control over the litigation.
• TPLF contracts give funders veto power over any settlement.
• TPLF contracts often invert and/or distort the attorney-client relationship, with counsel selected by and taking orders from the funder, not the funded plaintiff that counsel purports to represent.
• TPLF contracts often obligate the funded plaintiff to follow the funder’s chosen counsel, not the other way around, with the funder controlling when, or if, counsel can be replaced.
• TPLF contracts often require plaintiffs to seek only monetary recoveries, ignoring injunctive and other non-monetary relief, and some even penalize plaintiffs by forcing them to pay funders the “monetary value” of non-monetary relief.  Such skewed demands lead to skewed judicial outcomes.
• TPLF contracts can create “zombie litigation” where a funder refuses to settle, even though all of the actual parties – both plaintiffs and defendants – desire to do so.
• TPLF contracts swear plaintiffs to secrecy, forbidding plaintiffs from disclosing even the fact of funding absent a court disclosure order.
• TPLF contracts vaguely demanding “reasonable” cooperation from plaintiffs convert tactical and strategic disagreement into “breaches” of contract, for which plaintiffs may lose all control of the litigation, often as determined by arbitration controlled by funders.
• TPLF contracts often require counsel to report any “breaches” by their nominal clients to funders.
• TPLF contracts often alter plaintiff’s counsel’s compensation, and contain inducements over and above ordinary contingent fees.
• TPLF funders further exercise control over counsel by hiring them for “portfolios” of cases.
• TPLF contracts often require plaintiffs to provide funders secretly with confidential litigation documents, without regard to court confidentiality orders.
• TPLF contracts often insulate funders from paying for sanctions, even when the sanctionable conduct occurred at the funders’ behest.
• TPLF contracts are opaque, and likely to mislead judges viewing them ex parte, with boilerplate disclaimers of control being illusory in light of numerous other provisions providing funders with effective control over all aspects of litigation.

All of these bullet points from the LCJ submission are supported by specific citations – often multiple citations – to particular provisions in actual TPLF contracts that LCJ has collected in one place for the first time.  That alone is significant, since TPLF agreements are notoriously closely held and not generally available for critical evaluation.

The LCJ submission also contains citations to pertinent case law – much of which has been decided just in the past couple of years – that attorneys fighting for TPLF disclosure in individual cases will find highly useful.  See:  In re Fresh Acquisitions, LLC, 2025 WL 2231870 (Bankr. N.D. Tex. Aug. 5, 2025); Valjakka v. Netflix, 2025 WL 2263684 (N.D. Cal. July 10, 2025); MSP Recovery Claims Series, LLC v. Sanofi-Aventis U.S., LLC, 2024 WL 4100379 (D.N.J. Sept. 6, 2024); In re Pork Antitrust Litigation, 2024 WL 5118901 (Mag. D. Minn. Feb. 9, 2024), aff’d, 2024 WL 2819438 (D. Minn. June 3, 2024); In re: Valsartan NDMA Contamination Litigation, 405 F. Supp.3d 612 (D.N.J. 2019).

As the LCJ submission demonstrates, a simple, uniform rule of civil procedure mandating disclosure of the actual TPLF agreements to all parties is the only way to ensure that third-party funders are not secretly distorting litigation to serve their own ends, at the expense of everyone else, even (and often especially) the very plaintiffs that they fund.  Moreover, a blanket disclosure rule – as has proven to be the case with insurance disclosure – will be self-executing, without the need for incessant collateral litigation that the current “wild, wild west” approach to TPLF disclosure generates.

The LCJ submission conclusively establishes what we on the receiving end of third-party funded litigation instinctively knew all along − that (even more than the insurance agreements on our side of the “v.”) TPLF affects, or could affect, multiple facets of the litigation process, and thus has importance far beyond its relevance (or not) to the limited “claims or defenses” in a particular action.