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New Jersey bill would expose who bankrolls lawsuits
It would require parties to disclose third-party funding deals in covered civil cases. The bill also bars funders from steering the case, limits their share of recovery and sets penalties for violations.
New Jersey would pull third-party litigation funding, outside money that helps bankroll a case, into the open. In covered civil actions, parties would have to disclose funding agreements, giving judges and the other side a clearer picture of who is paying and what strings may be attached.
The money trail
The bill is built around transparency. It defines litigation expenses broadly to include court costs, filing fees, attorneys’ fees, expert witness fees, travel expenses and costs tied to identifying or soliciting potential clients before, during or after a case is filed or resolved.
It also draws a boundary around who counts as a litigation funder. Under the proposal, that means a person or entity with a direct or indirect right to receive compensation from the funding agreement. Close family members and attorneys acting in the course of representation would not count as funders.
Where the rule stops
The disclosure requirement would reach civil actions filed in the Superior Court’s Civil Part, not workers’ compensation claims. It also extends to certain administrative actions before state executive-branch agencies or tribunals, again leaving workers’ compensation out of the measure’s reach.
Why it matters in court
Litigation funding can shape how long a case lasts, how hard each side presses and who ends up benefiting if there is a settlement or verdict. By making those backers visible, the bill tries to put a real-world financial relationship on the record instead of leaving it buried behind the pleadings.