Preventive Transparency in Third-Party Litigation Funding

Authors

Seth Katsuya Endo

Publication Date

11-16-2025

Abstract

For years, efforts to comprehensively regulate third-party litigation funding have been unsuccessful. But bills requiring mandatory disclosure are being introduced in Congress, and the Advisory Committee for Civil Rules has finally agreed to take up the issue. By grounding the discussion of third-party litigation funding in both the broader civil procedure and professional responsibility scholarship, this Article identifies an easy, uncontroversial reform to preventively address the categorical concerns raised by the practice. The primary contribution is a doctrinal intervention, identifying how legal ethics are an integral part of federal civil procedure and then drawing out the implications for third-party litigation funding transparency. The policy upshot of anchoring the analysis in legal ethics is that at minimum, litigants must disclose, in camera, both the existence of any third-party litigation funding agreements and provisions giving any control over the litigation to the funder. While the framework and resulting recommendation are modest—a first step based on a close study of where the law already is, not what it could or should be as a matter of first principles or other policy considerations—their effects should be significant, highlighting what is necessary to conform current practices to the federal judicial disqualification statute and several nationally uniform professional-conduct rules while breaking the existing policy stalemate.

Recommended Citation

Seth Katsuya Endo, Preventive Transparency in Third-Party Litigation Funding, 120 Nw. U. L. Rev. 501 (2025).
https://scholarlycommons.law.northwestern.edu/nulr/vol120/iss3/1