New local Rule 7.1.1 (effective Aug. 5, 2021), changes the landscape of litigation funding disclosure in New Jersey’s federal courts. The District of New Jersey will now require all parties to file statements setting forth information about any non-party person or entity that is “providing funding for some or all of the attorney fees and expenses for the litigation on a non-recourse basis” in exchange for either “a contingent financial interest based upon” the litigation’s results or a “non-monetary result that is not in the nature of a personal or bank loan, or insurance.”
The new disclosure requirements are straightforward. The disclosing party must file a statement within 30 days of the filing of an initial pleading or removal, and would need to include: (1) the identity of the funder(s), including name, address, and place of formation (if a legal entity); (2) whether the funder’s approval is “necessary for litigation decisions or settlement decisions,” and if so, “the nature of the terms and conditions relating to that approval”; and (3) a description of the nature of the financial interest involved. Although the statement itself is uncomplicated, the consequences of the disclosure are significant.