Transparency in Third-Party Litigation Funding: A Pathway to Protect America’s National Security Interests

Authors

• Madison D. Gonzalez

Abstract

Third-party litigation funding (TPLF) has opened the courtroom doors for many Americans who may otherwise not be able to afford to seek justice in America’s civil court system. The democratization of the civil court system has benefitted many Americans but the lack of transparency as to the true identities of those behind the litigation has sparked concerns that America’s foreign adversaries may weaponize TPLF to harm America’s national security interests through lengthy and costly litigation. To address this threat, Congress and state legislatures have begun to explore policy changes to increase transparency in TPLF. Several states have adopted disclosure requirements for any TPLF agreements that involve certain adversarial countries. Individual federal judges have also begun to allow the discovery of third-party litigation funding arrangements under Federal Rule of Civil Procedure Rule 26(b). Proponents of allowing the discovery of TPLF agreements believe it will allow defendants to identify the real party in the litigation and address false David-versus-Goliath themes during the trial. Opponents of allowing the discovery of TPLF agreements believe that discovery will force them to disclose privileged work products and legal strategy in a way that would jeopardize the fate of the entire litigation financing industry. This article advocates for a two-pronged approach whereby courts allow extremely limited discovery of TPLF agreements under FRCP Rule 26 and states require limited disclosures of any funding from foreign countries of concern to America’s national security interests.

Recommended Citation

Madison D. Gonzalez, Transparency in Third-Party Litigation Funding: A Pathway to Protect America’s National Security Interests, 75 Cath. U. L. Rev. 540 (2025).
Available at: https://scholarship.law.edu/lawreview/vol75/iss3/8