H.R. 7015: Protecting Third Party Litigation Funding From Abuse Act

The bill, known as the Protecting Third Party Litigation Funding From Abuse Act, aims to introduce regulations focused on third-party litigation funding in civil cases. Here is a breakdown of its main provisions:

Initial Disclosures

The bill requires parties involved in civil actions to disclose certain information about third-party entities that may have a financial interest in the outcomes of the litigation. Specifically, any party or their attorney must:

1. Identify any third parties: They must provide the names of individuals or organizations that have a legal right to receive payments tied to the outcome of the lawsuit, which could include portions of settlements, judgments, or any other financial benefits.
2. Produce relevant agreements: They must submit any agreements that grant third parties the right to these payments for court review.
3. Share documents: Once documents are reviewed by the court, they must be shared with other involved parties, with certain protections for privileged information.

Exceptions and Limitations

There are specific circumstances under which these disclosure requirements do not apply:

1. If the third-party payment is only for loan repayment or for standard attorney’s fees due to service in the case.
2. If the identity of donors or members associated with the third party is also undisclosed unless they are entitled to a payment themselves.
3. Lists of donors and members can be redacted to protect their identities, unless they are recipients of payments tied to the litigation.

Timing of Disclosures

Parties must make the necessary disclosures within a specified timeframe, including:

1. 10 days after signing any relevant agreements.
2. At the time of initial disclosures required by federal civil procedure rules.
3. Any time frame set by the court.

Duty to Correct Information

Any party that makes a disclosure is required to update or correct it if they discover it to be inaccurate or incomplete and must do so promptly.

Applicability

The regulations set in the bill will affect all civil actions that are pending or initiated after the bill is enacted.

Relevant Companies

None found.