AUSTIN - The Texas Civil Justice League has sent a letter to Chief Justice Nathan Hecht of the Texas Supreme Court requesting that rulemaking be initiated to require some form of disclosure of the existence of third-party litigation funding agreements.
The letter asks Hecht to refer the issue to the Supreme Court Advisory Committee for study and the promulgation of a proposed rule to the Texas Rules of Civil Procedure.
The letter states that in the last 20 years the growing prevalence of third-party litigation funding has sparked a debate over which agreements should be disclosed, discoverable or otherwise regulated by the state.
In the letter, TCJL says it supports mandatory disclosure for both consumer and commercial litigation to all parties, and that in its view a disclosure statement should include:
- The name, address and place of formation of the third-party funder;
- Whether any funder’s approval is necessary for litigation or settlement decisions; and
- A brief description of the type of funding provided and whether any attorney’s fees that may be awarded will be subject assignment of the funder.
“A disclosure statement of this nature would put the court and parties on notice of a funding company’s interest in the outcome of the case without intruding into the realm of attorney work product, litigation strategy, or the specific amount of funding involved,” the letter states.