SCOTUS Chief’s Adviser Pans Broad Lawsuit Funding Disclosure (1)

The federal judge that serves as a top adviser to Chief Justice John Roberts doesn’t think courts should require outside funding behind lawsuits to be made public.

The biggest concern for courts is whether litigation funders are effectively taking over control of the cases in which they invest, Judge Robert M. Dow Jr. said Monday. Those concerns in most cases could likely be addressed by disclosing litigation finance agreements privately to judges and other parties involved in lawsuits.

“As long as the funder doesn’t have control, I don’t think it’s gonna be a major issue for judges,” Dow said, speaking at a conference in New York. Dow relinquished his seat on the federal district court in Chicago after being tapped in 2022 to serve as counselor to Roberts.

The $15.2 billion litigation finance industry, in which investors fund lawsuits in exchange for portions of settlements and verdicts, has come under scrutiny from some judges, legislators, and the US Chamber of Commerce in recent years.

Some states and federal courts require parties to disclose outside funding. Efforts to require disclosures across the federal judiciary have so far stalled.

Dow considered the topic when he was part of a committee reviewing federal court rules. He said disclosures could give parties that don’t use outside funding unfair insight into their opponents’ strategies.

“The concern I had when we were looking at this at the rules committee was public disclosure of too much really gets into litigation strategy,” he said. “That’s really not fair to give one side the other side’s litigation strategy unless it’s mutual.”

Dow was speaking at a conference hosted by the International Legal Finance Association, a leading litigation funding industry group.

He was joined on a panel by former Miami federal judge Ursula Ungaro and Sam Sheldon, an ex-magistrate in federal court in Texas. Both are now partners at prominent litigation firms, Ungaro at Boies Schiller Flexner and Sheldon at Robbins Geller Rudman & Dowd.

“I’m still struggling with the idea that any of this should be disclosed,” said Ungaro, whose firm uses outside funding in some cases.” There are all kinds of things that go on in the world that have some influences on lawyers and clients and judge’s cases, to think that disclosure is going to solve that problem is nonsense.”