As a result of the rapid growth of third-party litigation funding in recent years, New Jersey’s courts risk transforming into casinos for financiers looking to cash in. Outside investors, such as hedge funds, back plaintiffs’ litigation in return for a cut of any judgment or settlement. Without required disclosure of these financial arrangements, investors become the silent puppet masters of lawsuits. In other words, the actual parties may want to settle, but the financial backer may want more than what the plaintiff might accept. This leads to higher legal fees and wasted time for the court and parties involved in the dispute.

NJCJI successfully backed a third-party litigation funding disclosure rule in the United States District Court for the District of New Jersey. However, New Jersey state courts have no such rule. NJCJI is working with policymakers across the branches of government to bring the same requirements to the state courts. This common-sense disclosure rule brings symmetry to litigation—especially since defendants must disclose their insurance policy limits—and transparency to the process, so there is no imbalance of information in negotiations. This critical issue will only grow in importance, as more and more hedge funds and other financial institutions continue to enter this growing industry

Newsletter Sign Up

| Contact Us

New Jersey Civil Justice Institute
63 Coryell Street, Unit B,
Lambertville, NJ  08530

office: (609) 218-6331