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34 Cornell J. L. & Pub. Pol'y 1 (2024)

handle is hein.journals/cjlpp34 and id is 1 raw text is: ARTICLE THIRD-PARTY LITIGATION FUNDING: A CALL FOR DISCLOSURE AND OTHER REFORMS TO ADDRESS THE STEALTHY FINANCIAL PRODUCT THAT IS TRANSFORMING THE CIVIL JUSTICE SYSTEM Mark Behrens* Investors are pouring billions of dollars into large-scale (commercial) litigation funding, seeking to turn the courts into investment opportunities. Hedge funds, institutional investors, and others front money to law firms in exchange for a share of any settlement or judgment from an individual lawsuit or portfolio of lawsuits. These arrangements occur across a wide range of cases, including mass torts, commercial disputes, and intellectual property lawsuits. Third-party litigation funding is fundamentally changing the civil justice system in the United States. Proponents claim that such funding improves access to justice. The practice, however, has many negative impacts ranging from compromising lawyers' ethical duties; contributing to mass filings of speculative or unsupported tort claims; prolonging litigation and making settlements more difficult and costly to achieve; undermining U.S. companies; and creating a possible path for theft of trade secrets or other sensitive information. Some federal courts have taken the modest step of requiring disclosure of litigation financing. A growing number of states require mandatory disclosure of third-party litigation funding agreements. This Article advocates that courts and legislatures should require disclosure of third-party litigation funding agreements and adopt additional reforms such as to prevent funders from controlling or influencing litigation decisions. * Mark A. Behrens co-chairs Shook Hardy & Bacon L.L.P.'s Washington, D.C.-based Public Policy Group. He received his J.D. from Vanderbilt University Law School in 1990 and B.A. from the University of Wisconsin in 1987. He is on the Board of Directors of Lawyers for Civil Justice and has testified in support of state third-party litigation funding disclosure legislation on behalf of the U.S. Chamber of Commerce Institute for Legal Reform. 1

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