Litigation Funding Transparency Act of 2021
Bill: S.840 | Sponsor: Sen. Grassley, Chuck (R-IA)
Policy area: Law

Summary:
Litigation Funding Transparency Act of 2021
This bill requires lawyers for plaintiffs in certain lawsuits to provide the court and other parties in the lawsuit with any agreement that entitles an outside business (i.e., a business that is not a party, class member, or counsel in the lawsuit) to receive payment contingent on the lawsuit's outcome. The lawyers for the plaintiffs shall also provide the identity of the outside business.
Specifically, these requirements shall apply to any class action or multi-district litigation (i.e. related civil cases pending in different districts that are consolidated for pretrial proceedings).


To amend title 28, United States Code, to increase transparency and 
oversight of third-party litigation funding in certain actions, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Litigation Funding Transparency Act 
of 2021''.

SEC. 2. TRANSPARENCY AND OVERSIGHT OF THIRD-PARTY LITIGATION FUNDING IN 
              CLASS ACTIONS.

    (a) In General.--Chapter 114 of title 28, United States Code, is 
amended by adding at the end the following:
``Sec. 1716. Third-party litigation funding disclosure
    ``(a) In General.--In any class action, class counsel shall--
            ``(1) disclose in writing to the court and all other named 
        parties to the class action the identity of any commercial 
        enterprise, other than a class member or class counsel of 
        record, that has a right to receive payment that is contingent 
        on the receipt of monetary relief in the class action by 
        settlement, judgment, or otherwise; and
            ``(2) produce for inspection and copying, except as 
        otherwise stipulated or ordered by the court, any agreement 
        creating the contingent right.
    ``(b) Timing.--The disclosure required by subsection (a) shall be 
made not later than the later of--
            ``(1) 10 days after execution of any agreement described in 
        subsection (a)(2); or
            ``(2) the time of service of the action.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 114 of title 28, United States Code, is amended by adding at 
the end the following:

``1716. Third-party litigation funding disclosure.''.

SEC. 3. TRANSPARENCY AND OVERSIGHT OF THIRD-PARTY LITIGATION FUNDING IN 
              MULTIDISTRICT LITIGATION.

    Section 1407 of title 28, United States Code, is amended--
            (1) by redesignating subsections (g) and (h) as subsections 
        (h) and (i), respectively; and
            (2) by inserting after subsection (f) the following:
    ``(g)(1) In any coordinated or consolidated pretrial proceedings 
conducted pursuant to this section, counsel for a party asserting a 
claim whose civil action is assigned to or directly filed in the 
proceedings shall--
            ``(A) disclose in writing to the court and all other 
        parties the identity of any commercial enterprise, other than 
        the named parties or counsel, that has a right to receive 
        payment that is contingent on the receipt of monetary relief in 
        the civil action by settlement, judgment, or otherwise; and
            ``(B) produce for inspection and copying, except as 
        otherwise stipulated or ordered by the court, any agreement 
        creating the contingent right.
    ``(2) The disclosure required by paragraph (1) shall be made not 
later than the later of--
            ``(A) 10 days after execution of any agreement described in 
        paragraph (1)(B); or
            ``(B) the time the civil action becomes subject to this 
        section.''.

SEC. 4. APPLICABILITY.

    The amendments made by this Act shall apply to any case pending on 
or commenced after the date of the enactment of this Act.
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