Who is paying for the lawsuit? A federal rules fight over who must say.

The October 21 meeting will not change federal disclosure duties

The federal Advisory Committee on Civil Rules and its Third-Party Litigation Funding (TPLF) Subcommittee will meet October 21, 2026, in Washington, D.C. The meeting will be hybrid and open to public observation. Before it, both sides of a long-running question filed on the record: should the Federal Rules of Civil Procedure require parties to disclose third-party litigation funding, and how much should a rule reach?

Lawyers for Civil Justice (LCJ) and the U.S. Chamber of Commerce Institute for Legal Reform (ILR) submitted revised rules suggestion 26-CV-8 on March 10, 2026, and reiterated it in 26-CV-30 on September 8. The International Legal Finance Association (ILFA) submitted 26-CV-42 on October 7, signed by Executive Director Paul Kong, ahead of the meeting. ILFA filed its earlier full position on October 1, 2025.

A funding disclosure proposal has been on the Advisory Committee's agenda for about a decade. At its October 2024 meeting, the committee appointed a TPLF Subcommittee chaired by Chief Judge R. David Proctor of the Northern District of Alabama.

Nothing changes in federal court on October 21. A meeting is a discussion step. Any amendment would have to go through publication for public comment, then review by the Standing Committee, the Judicial Conference and the Supreme Court before taking effect.

LCJ and ILR seek the funder's identity and the full agreement

The LCJ and ILR proposal would amend Rule 26(a)(1)(A), which governs initial disclosures. It would require the name, address and telephone number of any nonparty, other than counsel of record, that directly or indirectly provides funding for the action and has a financial interest in it.

It would also require the funding agreement or other documentation concerning the funding terms to be available for inspection and copying under Rule 34. That is a disclosure to the opposing party, not only to the judge.

The supporters say the federal rules already require disclosure of financial interests in other settings. They cite the real-party-in-interest rule in Rule 17, the Rule 7.1 requirement concerning corporate owners of 10 percent or more, and insurance-agreement disclosure under Rule 26(a)(1)(A)(iv).

Their filings say funding contracts can give funders a share of judgments and settlements. They also say those contracts can give funders control or influence over litigation strategy and settlement. A uniform federal rule, they argue, would replace a patchwork of local rules and individual judges' standing orders that creates confusion and invites forum shopping.

The supporters oppose a rule requiring disclosure only to the judge. Their September 8 filing says no federal rule calls for ex parte communications with the judge. It points to 1970, when the Advisory Committee resolved a court split over insurance contracts by requiring disclosure to the parties. Supporters say the funding rule would allow objections and redactions, as the insurance rule does.

On September 14, 2026, 214 companies urged adoption of the LCJ and ILR proposal in rules suggestion 26-CV-31, a letter addressed to Carolyn A. Dubay, Secretary of the Committee on Rules of Practice and Procedure. Signatories reported by IPWatchdog include Amazon, Google and Microsoft, along with insurers and manufacturers. The letter says “the absence of a TPLF disclosure requirement is inexplicable.”

ILFA says automatic production would reverse prevailing practice

ILFA, a trade association of more than 30 commercial legal finance companies, says in its October 7 submission that courts already require disclosure when funding is relevant and proportional under Rule 26(b)(1).

According to ILFA, the weight of authority treats funding agreements as not discoverable for three reasons: irrelevance, work product and prejudice. Quoting the committee's own October 2026 agenda book, ILFA says disclosing an agreement's details could give the opposing party a guide to exhausting its opponent's resources.

ILFA's submission states that the proposed rule “would not codify existing practice. It would reverse it.” It also says the record “does not show a rules problem.”

ILFA reported its own review of more than 475 federal actions, including 163 orders resolving disclosure motions in 153 cases. Only 19 orders, or 12 percent, required production of a funding agreement to an adversary, according to the submission. Each order rested on a case-specific ground. ILFA identified patent standing, patent valuation and class adequacy as examples.

ILFA also summarized a Federal Judicial Center study of five years under New Jersey Local Civil Rule 7.1.1, from June 2021 through June 2026, reprinted in the October 2026 agenda book. According to ILFA's summary, the study found funding disclosures in 104 cases, about one filing per 1,000 civil cases in the district, with no upward or downward trend.

ILFA says it would help draft a rule if the committee proceeds. Its submission says such a rule could serve legitimate disclosure interests while protecting sensitive information and work product.

Delaware and Kansas separate control rights from agreement contents

Delaware's state Superior Court adopted a middle-ground model on September 30, 2026. The order added Civil Rule 26(b)(3), titled “Litigation-funding agreements,” and took effect the same day.

The rule applies only when two conditions exist. The funder must have a right to repayment contingent on the outcome, and a contractual right to control aspects of the litigation, such as approving a settlement.

In that situation, parties may discover the agreement's existence, the parties to it and the control rights. They may not discover the agreement itself or its contents, case information shared with the funder or attorney work product. For cause, the court may order production of the portion granting control rights. The agreements are not admissible at trial.

The rule grew out of a Delaware Supreme Court committee report dated June 30, 2023. ILFA cites the rule as an example of limiting discovery rather than requiring production of the entire agreement.

Kansas enacted a different limited-disclosure model in April 2025 through Senate Bill 54. The law requires limited disclosures about funding agreements and permits verification through in camera review, rather than production of the agreement to adversaries. ILFA describes the law as a compromise that ILR agreed to.

Before publishing, the desk read 26-CV-30, 26-CV-31 and 26-CV-42 directly from the U.S. Courts rules suggestions page. Read side by side, the filings show both camps relying on insurance disclosure as a reference point. The companies point to Rule 26(a)(1)(A)(iv) as a template for full disclosure to parties. ILFA points to Delaware's new rule, which the Delaware court describes as limiting funding discovery in a way comparable to its insurance-agreement provision.

Until a federal rule exists, disclosure depends on the court

Until a federal amendment takes effect, disclosure duties depend on the district and the judge. The District of New Jersey has Local Civil Rule 7.1.1, adopted June 21, 2021. In the District of Delaware, Chief Judge Connolly issued a standing order on April 18, 2022. Other courts have issued orders, while many courts have none. In Delaware's state Superior Court, Rule 26(b)(3) has applied since September 30, 2026.

The dispute is about scope as much as whether disclosure exists. The competing models address the funder's identity, control rights, disclosure to the court, disclosure to the parties and production of the full agreement. The LCJ and ILR text reaches the agreement itself. Delaware and Kansas focus on narrower information, including control rights and limited disclosures verified in camera.

Archivar, which publishes The Docket, builds an operating system for law firms that answers every call 24/7 in English and Spanish, runs intake and remembers everything the firm does. Whether someone else has a financial stake in a matter is the kind of fact that often first surfaces during intake, which is why the desk is following where these disclosure rules land.

For federal matters, the governing source on funding disclosure remains the district's local rules, its standing orders and the assigned judge's own orders. The October 21 meeting is a rules discussion, not an effective date.

Companies want funders named and their agreements produced to the other side.

Funders say courts already order disclosure when a case calls for it.

Delaware and Kansas have each drawn the line somewhere in between.