Where Federal Courts Currently Require Litigation Funding Disclosure

A rule-by-rule look at the specific local rules and standing orders that require disclosing a third-party funder, and what each one actually demands.

Does a federal court require disclosure of litigation funding? There is no single national rule — the Federal Rules of Civil Procedure impose no funding-disclosure requirement — but a growing number of individual districts and judges have adopted their own local rules or standing orders, and the specific disclosure obligation varies meaningfully depending on which one applies.

The District of New Jersey adopted the most comprehensive rule to date. Local Civil Rule 7.1.1, effective June 21, 2021, requires that within 30 days of filing an initial pleading, or promptly after learning of the relevant information, parties must file a statement identifying any non-party providing funding for attorneys' fees or litigation expenses on a non-recourse basis in exchange for a contingent financial interest in the outcome. The rule does not require producing the funding agreement itself; it requires identifying the funder's existence and general terms. Rule 7.1.1(b) allows a party to seek discovery of the agreement's specific terms only on a showing of good cause — for example, that the funder holds authority over litigation or settlement decisions, or that a conflict of interest may exist.

The District of Delaware took a different approach centered on one judge's docket rather than a district-wide rule. In April 2022, then-Chief Judge Colm F. Connolly issued a standing order applicable to cases assigned to him requiring litigants to identify any third-party litigation funder, describe the nature of the funder's stake, and disclose whether the funder's approval is required for litigation or settlement decisions. The order applies to both plaintiffs and defendants and, notably, extended to pending cases as well as new filings, with existing cases given a defined window to comply. The order has been credited with a significant subsequent decline in patent infringement filings in that district, according to reporting on the order's practical effect.

Other districts and individual judges have adopted narrower or differently scoped requirements, and some, including certain judges in the Northern District of California, have addressed funding disclosure through standing orders requiring disclosure of any person or entity with a financial interest in the litigation's outcome as part of broader conflicts-of-interest or recusal-related disclosures, rather than a funding-specific rule modeled on New Jersey's. Because these requirements are adopted judge-by-judge or district-by-district rather than through a uniform national rule, counsel appearing in multiple federal districts should confirm the specific local rule or standing order in effect in each forum rather than assuming a New Jersey- or Delaware-style requirement applies elsewhere.

A federal bill titled the Litigation Funding Transparency Act has been introduced in Congress in various forms across multiple sessions, which would impose a nationwide disclosure requirement in federal civil litigation and MDL proceedings if enacted; as of this writing it has not been enacted into law, and disclosure obligations in federal court continue to depend on the specific district and judge rather than a uniform federal statute.

The practical compliance burden these rules create differs meaningfully depending on their scope. New Jersey's Local Civil Rule 7.1.1 applies district-wide, so any case filed in that district triggers the identification obligation regardless of which judge is assigned, making it a routine, checklist-style filing item for counsel practicing there. Delaware's approach, tied to an individual judge rather than the district as a whole, means the same underlying case can face a disclosure obligation or not depending purely on which judge it is assigned to — a structural quirk that has led litigants in some instances to weigh case assignment considerations, where discretion exists, against the prospect of a funding-disclosure requirement attaching to the matter.

The trend line across the past several years has moved toward more, not less, judicial interest in funding transparency, even without a uniform national rule. Individual judges in multiple other districts have adopted their own case-management orders addressing funding disclosure in specific contexts, particularly in patent litigation and multi-district litigation proceedings, where courts have shown heightened interest in understanding who is economically driving a case's litigation strategy. Firms and funders operating nationally should expect this patchwork to continue expanding rather than converging toward a single standard in the near term, and should build a practice of confirming the specific judge's and district's current requirements at the outset of any new matter rather than relying on institutional knowledge from a prior case in a different forum.

For firms and funders managing a national docket, the practical response to this rule-by-rule patchwork is usually procedural rather than substantive: build a case-intake checklist that flags, for every new federal filing, whether the assigned district has a district-wide rule like New Jersey's, whether the assigned judge individually has adopted a standing order like Delaware's, and what the applicable deadline for identification is under whichever regime applies. Because New Jersey's rule ties its filing clock to the initial pleading while Delaware's order runs from the standing order's own effective date for pending matters, a single national tracking calendar that treats every district as though it followed the same trigger risks missing a deadline in whichever jurisdiction actually differs from the template. Firms handling a volume docket across multiple districts typically assign this tracking to whoever already owns conflicts-checking and case-opening procedures, since the underlying discipline — confirming the specific rule in force before the clock starts running — is the same skill set applied to a newer category of disclosure obligation.

Sources: D.N.J. Local Civil Rule 7.1.1 (effective June 21, 2021); District of Delaware Standing Order Regarding Third-Party Litigation Funding Arrangements (Chief Judge Colm F. Connolly, April 2022); Litigation Funding Transparency Act (introduced in multiple Congresses, not enacted). Individual judges' standing orders change over time and should be confirmed directly against the relevant court's current published orders before a filing deadline.

Funding agreements and any required disclosure statements are structured to comply with the specific local rule or standing order governing each matter's forum, coordinating with counsel on the scope of what must be disclosed in that district. Firms litigating in a jurisdiction with an unfamiliar disclosure requirement can contact our institutional team for guidance on how our agreements are typically described in a compliant disclosure statement.

Discuss your matter with our institutional team.