Protecting Third Party Litigation Funding From Abuse Act; Protecting TPLF From Abuse Act
Summary
The "Protecting Third Party Litigation Funding From Abuse Act" aims to increase transparency in civil actions by requiring parties to disclose third-party beneficiaries who have a legal right to receive payments contingent on the outcome of the case. This includes revealing the identity of individuals or entities entitled to a portion of settlements, judgments, or attorney's fees. The bill outlines exceptions for standard loan repayments and attorney's fee reimbursements, and it includes provisions to protect the privacy of donors and members not directly benefiting from the litigation.
Expected Effects
The Act will likely lead to increased scrutiny of litigation funding arrangements in civil cases. Parties will need to conduct due diligence to identify and disclose relevant third-party beneficiaries. This could potentially deter some litigation funding agreements or lead to changes in how they are structured.
Potential Benefits
- Increased transparency in civil litigation.
- Greater awareness of potential conflicts of interest.
- Potentially reduced manipulation of legal proceedings by undisclosed third parties.
- Protections for the privacy of donors and members not directly involved in benefiting from litigation funding.
- Clarification of disclosure requirements through defined exceptions and limitations.
Potential Disadvantages
- Potential chilling effect on legitimate litigation funding, especially for smaller plaintiffs.
- Increased administrative burden on parties to identify and disclose third-party beneficiaries.
- Possible strategic use of disclosure requirements to harass or intimidate opponents.
- Risk of disputes over the scope of disclosure requirements and exceptions.
- Potential for increased litigation costs due to compliance and discovery related to third-party funding.
Constitutional Alignment
The bill primarily affects the judicial process and aims to ensure fairness and transparency in civil proceedings. While the Constitution does not explicitly address third-party litigation funding, the bill's focus on transparency aligns with the broader constitutional principles of due process and equal protection under the law, as outlined in the Fifth and Fourteenth Amendments. The bill also includes provisions to protect privacy, which resonates with the spirit of the Fourth Amendment.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).