A new legislative push to increase transparency in third-party litigation funding (TPLF) has ignited concern over the potential erosion of individual privacy rights, especially for plaintiffs involved in sensitive litigation. While the bill aims to shed light on opaque funding arrangements, critics warn that it could open the door to broad and unnecessary disclosures of personal data.
An article in The Hill notes that among the more controversial aspects of the proposed bill is its requirement that plaintiffs and their attorneys disclose the details of any litigation funding agreements. These disclosures could go far beyond identifying funders, potentially revealing case-specific facts, medical or financial histories, and other personally identifiable information. There is no clear guidance on how such disclosures would be protected, raising the specter of public filings that expose vulnerable claimants to undue scrutiny or retaliation.
The breadth of the bill has drawn particular criticism. While aimed at foreign or undisclosed financial backers, its language is sweeping enough to encompass nearly any financial relationship, including arrangements with U.S.-based funders operating under existing regulatory frameworks. Legal observers worry that plaintiffs—especially those with lower means—may be discouraged from pursuing meritorious claims due to the fear of invasive data exposure.
Privacy advocates argue that without significant revisions, the bill risks creating a litigation environment in which strategic intelligence gathering by adversaries, funder interference, and reputational harms become routine. Several industry experts are calling for narrowly tailored disclosures limited to material funding terms, coupled with robust confidentiality protections and strict limits on public access.
