A federal rulemaking proposal would require automatic production of litigation funding agreements in every civil case absent entry of a protective order. Initially submitted in March by the U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) and Lawyers for Civil Justice (LCJ), the proposal would amend Rule 26(a)(1)(A) on the premise that funders exercise control over litigation and settlement decisions that “deeply split” courts cannot otherwise identify or address.

The International Legal Finance Association (ILFA) opposes this proposed rule for reasons previously stated to the Civil Rules Advisory Committee, including that control concerns are unsubstantiated. In other words, “diametrically opposed narratives” persist in the decade-long disclosure debate.

Here, we begin testing those narratives based on an empirical review of litigation funding in the federal courts. Our analysis is based on what we believe to be the most comprehensive dataset of federal cases involving litigation funding ever assembled: over 475 actions, including those with confirmed funding, suspected funding, and contested disclosure motions, drawn from years of court records, including dozens of unpublished orders.

The data does not support the proposed rule. Nor does it support the contention that courts are “sharply divided.” Instead, it supports the conclusion that courts have developed a coherent, case-specific approach to disclosure that is already working, and that this approach has never produced the outcome that ILR and LCJ propose to be the default.

Research Findings

Our analysis focuses on 163 identified court orders resolving disclosure motions, drawn from 153 distinct cases. We examine the types of litigation where disclosure is concentrated, how frequently courts order agreement production, and the grounds on which they have done so. The data leads to a single conclusion: no court has ever ordered what ILR and LCJ’s proposed rule would make automatic.

Finding 1: Two categories of litigation account for nearly two-thirds of all disclosure grants

Among the 74 rulings granting some form of disclosure, 48 (65%) involve intellectual property or personal injury/torts. Intellectual property cases account for 33 (45%) of the total. In these cases, courts have found that funding bears on issues exclusive to intellectual property that do not arise in ordinary commercial disputes, such as patent valuation and real party in interest. Injury and mass tort cases make up another 15 (20%) of the total. Here, courts typically apply state-law standards governing funder relationships with treating physicians, medical lien doctrines, or collateral source rules. These too are factors with no equivalent in non-injury litigation. IP and injury together account for nearly two-thirds of all disclosure grants. In both categories, it is not funding's presence that drives disclosure. It is something specific to the legal issues in the case.

Finding 2: Agreement production is the exception, not the rule

Across all 163 federal disclosure rulings, courts denied 89 motions and granted some form of disclosure in 74. But granting disclosure is not the same as ordering agreement production. For example, a court requiring a party to identify a funder is categorically different from handing its funding agreement to an adversary. Of the 163 decisions, only 19 (12%) resulted in production of a funding agreement to an opposing party.

Finding 3: No court has ever ordered agreement production based solely on the presence of funding

None of the 19 agreement production orders turned on the mere presence of funding. Each articulated a relevant circumstance related to an issue in the case, such as patent standing, patent valuation, state-law medical damages rules, class action adequacy, and credibility. The chart below shows how the production grounds for all 19 orders break down across seven disclosure factor categories.

The Functioning Framework in Place

The data reflects a principled judicial framework, not an absence of one. Courts presiding over patent disputes, commercial cases, mass torts, and employment matters have applied consistent Rule 26 and 34 standards to reach the same conclusion: the fact of funding, without more, is insufficient to warrant broader disclosure. The proposed rule would presume production in every case. No court has ever reached that result, nor is it justified in practice.

Two independent judicial bodies have arrived at the same conclusion. In June 2023, the Delaware Supreme Court’s Third-Party Litigation Funding Committee, co-chaired by Vice Chancellor J. Travis Laster and Superior Court Judge Eric M. Davis, concluded that there “do not appear to be any issues with the current use of third-party litigation funding in the Delaware state courts.” The Committee found that “in practice, litigation funders do not obtain rights concerning control over a lawsuit or over settlement.” After surveying the Delaware bar, the Committee declined to recommend implementation of a new rule, observing that “the existing procedures and frameworks have provided a path to disclosure.”

In August 2025, the Texas Supreme Court Advisory Committee rejected a forced disclosure proposal comparable to that of ILR and LCJ by a vote of 14 to 5, after full deliberation by a committee composed of judges, academics, defense lawyers, and plaintiffs’ lawyers. Committee member Justice Peter Kelly observed that “this is legislation or rule-making by anecdote and not by any considered empirical survey of what -- how this is affecting the civil justice system at all.”

The data and studies are also consistent with what practitioners report from real-world experience. In October 2025, a group of prominent, Chambers-ranked practitioners submitted a detailed letter to the Advisory Committee, drawing on hundreds of commercial funding transactions with every major funder active in the United States. Their letter confirms that (1) passivity is a “central pillar” of commercial litigation funding; (2) funding agreements invariably give the funded party the unilateral right to settle; and (3) control disclaimers are “material terms” that are “rarely subject to any substantive negotiation.”

It is perhaps unsurprising that all of the foregoing are consistent with a near-universal lack of control indicated by publicly filed disclosure statements. District of New Jersey Local Civil Rule 7.1.1 and Chief Judge Colm Connolly’s standing order in the District of Delaware collectively account for 70 affirmative disclosure statements in ILFA’s dataset. Both require disclosure of funder control rights. Only three of the 70 (4%) statements described some form of third-party involvement in case direction. And of those three, none involved a conventional commercial litigation funder asserting approval rights over litigation or settlement decisions. Instead, they consist of an informal arrangement between affiliated distribution network entities, a cause-based financing structure, and a commercial co-development partnership.

To the extent federal disclosure regimes are in place, they are consistently limited in scope. Not one standing order, local rule, or individual judge’s requirement anywhere in the country requires automatic production of funding agreements to adversaries. This includes standing or case-specific orders issued by Judges J. Philip Calabrese (N.D. Ohio), Colm Connolly (D. Del.), Carmen Henderson (N.D. Ohio), Anne-Leigh Gaylor Moe (M.D. Fla.), Dan Polster (N.D. Ohio), and Robin Rosenberg (S.D. Fla.), as well as the District of New Jersey Local Civil Rule 7.1.1, the Northern District of California’s Standing Order, and the Western District of Louisiana Standing Order 1.75. Many of these individual requirements have been in place for years in high-volume jurisdictions. None has uncovered the problems that the proposed rule presumes are endemic.

Workable Alternatives Already in Place

The debate over litigation funding disclosure is often framed by disclosure proponents as binary: either funders operate in secrecy, or their agreements must be produced to adversaries as a matter of default. The legislative record from the past year shows that framing is false.

Kansas Senate Bill 54, signed into law in April 2025, provides a targeted framework: funders disclose their identity and the existence of control-rights provisions; the agreement is produced in camera to the court only; and foreign-country-of-concern provisions address national security interests directly. The U.S. Chamber of Commerce voluntarily negotiated and agreed to that framework in a joint compromise with ILFA. ILR has never explained why in camera review is sufficient at the state level but insufficient federally, or what interest adversarial production serves that Kansas SB 54 does not.

Conclusion

163 federal disclosure decisions. 19 agreement productions. Zero based solely on the presence of funding. The data does not identify a problem that the ILR and LCJ’s rule purports to solve. It identifies a framework that is already working. That record is consistent with the findings of two independent judicial committees, the experience of practitioners, and years of local rule disclosure statements.

A default production rule would serve no purpose other than delivering a windfall of litigation intelligence to opposing parties. It would not unify existing practice. It would instead mandate something that no court has ever decided to do, in a manner that would invariably generate agreement-specific motion practice and only magnify the “patchwork” ILR and LCJ purport to mend.

Litigation funders do not oppose disclosure because we have something to hide. It is because we have something to protect. Specifically, the sensitive information ILR and LCJ are currently attempting to obtain through the Advisory Committee because they have not succeeded through the courts.

Opinion Disclaimer: The opinions and views expressed in this article are those of the author and not necessarily those of The National Law Review.