New native regulation permits disclosure of litigation funding in New Jersey federal courts
The new local rule 7.1.1 (effective August 5, 2021) changes the disclosure of litigation funding in New Jersey federal courts. The District of New Jersey will now require all parties to submit statements containing information about any non-party individual or legal entity that “funds some or all of the legal fees and litigation costs on a non-recourse basis” in exchange for either ” contingent financial interest based on the outcome of the litigation ”or against a“ non-monetary outcome that is not the nature of a personal or bank loan or insurance ”.
The new disclosure requirements are simple. The disclosing party must file a statement within 30 days of filing an initial plea or removal, including: (1) the identity of the funder (s), including name, address, and place of incorporation (if a (legal entity); (2) whether the sponsor’s consent is “required for any litigation or settlement decision” and, if so, “the nature of the terms relating to that consent”; and (3) a description of the nature of the financial interest involved, although the statement itself is straightforward the consequences of disclosure are significant.