Are Litigation Funding Agreements Discoverable? (w/Examples) + FAQs

Yes, litigation funding agreements can be discoverable — but whether a court will order disclosure depends on the jurisdiction, the type of case, and the specific facts involved. Courts across the country are split on this issue, and the rules change depending on whether you are in federal or state court, which district or state you are in, and what claims or defenses are at play.

Third-party litigation funding is a multi-billion-dollar industry that was valued at roughly $20–25 billion globally in 2024–2025, with projections showing it could exceed $56 billion by 2034. Nearly a quarter of all patent infringement cases in the United States are now backed by third-party funders, yet there is still no uniform federal rule governing when these agreements must be disclosed. The result is a patchwork of state statutes, local court rules, and case-by-case judicial decisions that leave litigants and their attorneys guessing.

Here is what you will learn in this article:

• 🏛️ How federal courts handle discovery of litigation funding agreements — and why there is no single rule
• 📜 Which states now require automatic disclosure of funding arrangements and what those laws demand
• ⚖️ Real court cases where judges allowed or denied discovery — and the specific facts that made the difference
• 🛡️ How the work product doctrine, common interest privilege, and attorney-client privilege protect (or fail to protect) funding documents
• 🚫 The most common mistakes parties make when dealing with litigation funding discovery — and how to avoid them

What Is Third-Party Litigation Funding?

Third-party litigation funding (TPLF) is an arrangement where a non-party — usually a private investment firm — provides money to a plaintiff or law firm to cover litigation costs. In exchange, the funder receives a portion of any settlement or court award. If the case loses, the funder gets nothing. This is what makes TPLF a non-recourse investment.

There are two main types. Consumer legal funding provides small, non-recourse cash advances to injured individuals with pending claims so they can cover living expenses like rent or medical bills. Commercial litigation funding involves larger investments in business-to-business disputes such as breach of contract, trade secret misappropriation, patent infringement, and antitrust cases. Commercial funding deals can involve millions of dollars and require extensive due diligence by the funder before investing.

The distinction matters for discoverability. Consumer funding agreements tend to involve simpler terms and smaller amounts. Commercial funding agreements are more complex, often contain detailed case assessments, and may reflect an attorney’s mental impressions about the merits of a case. Courts treat these differently when deciding what must be disclosed.

Federal Rules: No Uniform Requirement — Yet

There is currently no nationwide federal rule that requires parties to disclose litigation funding agreements in civil cases. Federal Rule of Civil Procedure 7.1 requires corporate parties to file disclosure statements identifying parent corporations and publicly held companies with financial interests. But Rule 7.1 was not written with litigation funders in mind and does not specifically require their disclosure.

This gap has created inconsistency. Roughly 25% of all federal district courts have local rules or forms broad enough to capture the identity of litigation funders. Nearly half of the federal appellate courts — including the Third, Fourth, Fifth, Tenth, and Eleventh Circuits — have local rules that expand on Federal Rule of Appellate Procedure 26.1 to require disclosure of entities with financial interests in the outcome of a case. But these rules focus on identity for recusal purposes. They do not require production of the actual funding agreement or its terms.

The Push for a Federal Rule

Pressure for a uniform rule has been building for over a decade. In October 2024, the U.S. Judicial Conference’s Advisory Committee on Civil Rules agreed to form a subcommittee to study whether a federal disclosure rule is needed. This came after more than 120 major companies — including Amazon and Google — sent a letter urging the Committee to amend the Federal Rules of Civil Procedure.

In Congress, Representative Darrell Issa introduced the Litigation Transparency Act of 2024 (H.R. 9922), which would require parties in all federal civil cases to disclose in writing the identity of any person with a right to receive payment contingent on the lawsuit’s outcome. The bill was referred to the House Judiciary Committee. Issa later introduced an updated version in 2025, and a related bill — the Protecting TPLF From Abuse Act — was debated in House Judiciary in January 2026 and reported out of committee by a vote of 15-11.

Senators John Kennedy and Joe Manchin also introduced bipartisan legislation in 2023 (S.B. 2805) targeting foreign third-party litigation funding, aiming to prohibit funding by foreign states and sovereign wealth funds. No final bill has reached the President’s desk as of early 2026, but the legislative momentum is clear.

Federal District Courts With Specific Disclosure Rules

While a national rule does not exist, several federal district courts have gone ahead and adopted their own requirements. These rules vary in scope and detail.

New Jersey’s rule is the broadest. It applies to all pending cases, covers non-recourse funding arrangements exchanged for contingent financial interests, and requires the filing of a disclosure statement. Delaware’s standing order was adopted by Chief Judge Connolly and closely mirrors New Jersey’s framework. Both allow further discovery beyond initial disclosures only upon a showing of good cause — such as evidence the funder controls litigation decisions or conflicts of interest exist.

MDL-Specific Orders

Some judges overseeing large multidistrict litigation (MDL) cases have crafted their own disclosure orders. In In re National Prescription Opiate Litigation (N.D. Ohio 2018), the court required counsel with third-party financing to submit ex parte letters identifying funders and sworn affidavits confirming the funding creates no conflicts of interest. In In re Zantac (S.D. Fla. 2020), applicants for plaintiff leadership roles had to disclose whether their firms had contingent financing, describe its nature and amount, and submit documentation to the Special Master. In In re 3M Combat Arms Earplug (N.D. Fla. 2023), the court went further and required disclosure of funding amounts, fees, interest rates, and all material terms.

State Laws Requiring Disclosure

A growing number of states have taken matters into their own hands. As of mid-2025, at least nine states have enacted laws addressing litigation funding disclosure, and about half of all states have at least considered similar legislation.

Montana’s law is considered the most comprehensive. It requires delivery of the full contract — not just the funder’s identity — to every party, the court, and any known insurer with an obligation to indemnify a party. The disclosure obligation begins before a civil action is even filed, and it imposes a continuing duty to update within 30 days of any new or amended agreement.

Wisconsin was the first state to act, in 2018. Its law requires automatic disclosure, meaning the funded party must hand over the agreement without waiting for a discovery request. West Virginia followed a similar approach. By contrast, Louisiana and Oklahoma simply confirm that funding agreements are within the scope of discovery — meaning the opposing party still has to ask for them through the normal discovery process.

Colorado passed a law in 2025 that takes a different angle. It focuses on foreign financiers, requiring them to provide certain information to the Colorado Attorney General and making funding agreements subject to discovery. Arizona and Montana also passed 2025 legislation specifically aimed at preventing foreign entities of concern from funding litigation in American courts.

When Courts Have Allowed Discovery — Three Key Scenarios

Courts do not agree on when litigation funding information should be discoverable. But patterns have emerged. Here are the three most common scenarios where courts have permitted discovery.

Scenario 1: Patent Infringement Cases

Patent cases are the most fertile ground for litigation funding discovery. Courts have recognized that funding agreements in patent cases often contain valuations of the patents at issue, statements by the plaintiff about the patents, and information relevant to damages calculations.

In Continental Circuits v. Intel (D. Ariz. 2020), the court held that the identities of a plaintiff’s financial backers should be discoverable because relevancy in civil litigation “is a relatively low bar,” and because such discovery “could be used to refute any David vs. Goliath narrative at trial.” In Electrolysis Prevention Solutions v. Daimler Truck (W.D.N.C. 2023), the court held that funding agreements and related documents containing statements and analysis of the patent’s value were discoverable. And in Impact Engine v. Google (S.D. Cal. 2020), the court explained that “courts have generally ruled that litigation funding agreements and related documents are relevant and discoverable in patent litigation.”

Scenario 2: Class Action Adequacy and Conflicts

When a class action is involved, courts have allowed discovery into funding arrangements to determine whether class counsel can adequately represent the class without being conflicted by a funder’s interests.

In Gbarabe v. Chevron (N.D. Cal. 2016), the court granted Chevron’s motion to compel disclosure of the plaintiff’s funding agreement in a class action arising from an oil rig explosion. The court needed to determine whether counsel could adequately represent the class, and plaintiff’s counsel conceded that funding had relevance to that inquiry. In Burkhart v. Genworth Financial (Del. Ch. 2024), the court allowed discovery in a class action because the presence of funders “creates the potential for conflicts of interest that may incentivize counsel to prioritize the interests of the Funders over those of the class.”

Scenario 3: Fraud, Staged Incidents, and Credibility

When defendants present evidence of fraud or staged incidents, courts have found that funding information is directly relevant to the claims and defenses in the case.

In Lituma v. Liberty Coca-Cola Beverages (N.Y. App. Div. 2026), New York’s Appellate Division made history by affirming a trial court’s order directing disclosure of litigation funding in a personal injury case. Defendants had presented evidence linking plaintiffs to a “fraud ring” involving other claimants in similar, allegedly staged motor vehicle accidents. The court held that funding information was “material and necessary” because it could reveal a financial motive for fabricating the incident.

In Carroll v. Trump (S.D.N.Y. 2023), the court permitted limited discovery into E. Jean Carroll’s funding arrangements, finding that while litigation funding “has nothing directly to do with the ultimate merits of the case,” it “perhaps might prove relevant to the question of plaintiff’s credibility.” The court allowed one additional hour of deposition testimony and limited document production.

In Smartmatic v. Fox Corp. (N.Y. Sup. Ct. 2023), the court held that while New York case law generally provides that litigation financing agreements are not discoverable, defendants were entitled to the information because plaintiff’s motivation to sue was an element of defendants’ anti-SLAPP counterclaim.

When Courts Have Denied Discovery

Not every request for litigation funding information succeeds. Courts frequently deny discovery when the requesting party cannot show that the funding is relevant to a specific claim or defense in the case.

In In re Valsartan (D.N.J. 2019), the court denied discovery in a products liability MDL, holding that “plaintiffs’ litigation funding is a ‘side issue’ that has nothing to do with addressing the key issues in the case.” The court rejected the argument that discovery was needed to identify the “real party in interest,” noting that defendants had “not cited to a single instance where a litigation funder owned the right to recover rather than being a passive investor.”

In V5 Technologies v. Switch (D. Nev. 2019), the court rejected a defendant’s request for funding documents, holding that the request “amounts to rank speculation that does not suffice to bring its requests within the realm of permissible discovery.” The court colorfully described the defendant’s arguments as an attempt to “put on its own parade of horribles.”

In Kaplan v. S.A.C. Capital Advisors (S.D.N.Y. 2015), the court denied the motion to compel even though plaintiffs had admitted they were using third-party funding. The court held that the “plaintiffs’ admission that they have entered into a litigation funding agreement does not, of itself, constitute a basis for questioning counsel’s ability to fund the litigation adequately.”

In Benitez v. Lopez (E.D.N.Y. 2019), the court similarly held that a litigation funding agreement was not relevant to the litigation and should not be discoverable. And in a patent case, GoTV v. Netflix (C.D. Cal. 2023), the court rejected defendant’s argument that funder information was relevant because the defendant’s relevancy theories were merely “speculative.”

How Privileges Protect (or Fail to Protect) Funding Documents

Even when a court finds that funding information is relevant, the documents may still be shielded by various privilege doctrines. Understanding how these protections work — and where they break down — is critical for any party involved in litigation funding.

The Work Product Doctrine

The work product doctrine, codified in Federal Rule of Civil Procedure 26(b)(3), protects documents prepared in anticipation of litigation from discovery. Courts have broadly applied this doctrine to protect litigation funding documents.

In Miller UK v. Caterpillar (N.D. Ill. 2014), the landmark case on this issue, the court observed that it would be “ridiculous” to force a litigant to choose between obtaining capital and sacrificing confidentiality. The court held that documents shared with funders pursuant to a non-disclosure agreement did not lose their work product protection. Miller went on to win a $74.6 million jury verdict — the largest ever under the Illinois Trade Secret Act at the time.

Courts draw a line between fact work product and opinion work product. Fact work product — basic factual information shared with a funder — receives ordinary protection that can be overcome by a showing of substantial need. Opinion work product — an attorney’s mental impressions, legal theories, and strategic analysis — receives near-absolute protection.

In Fulton v. Foley (N.D. Ill. 2019), the court split the difference. It held that the plaintiff had to produce “all non-mental impressions, fact-based information and documents, including any statements provided by Plaintiff directly,” but that documents reflecting counsel’s mental impressions and litigation strategies were not discoverable.

A comprehensive analysis of federal case law found that only two judges have concluded that sharing information with a funder waives all work product protection. The overwhelming trend favors protection — as long as the parties maintain confidentiality.

The Common Interest Doctrine

The common interest doctrine is an extension of the attorney-client privilege that prevents waiver when privileged information is shared with a third party who shares a common legal interest. Courts are divided on whether this doctrine protects information shared with litigation funders.

The split comes down to how broadly a court defines “common legal interest.” Courts that take a narrow view say a funder’s interest is purely financial, not legal, and therefore does not qualify. In Miller UK v. Caterpillar, the same court that protected documents under the work product doctrine rejected the common interest argument, calling the funder-plaintiff relationship merely “a shared rooting interest in the successful outcome of a case.”

Courts that take a broader view recognize that funders and plaintiffs share a common enterprise and that protecting their communications encourages cooperation. In Devon It v. IBM (E.D. Pa. 2012), the court found the common interest doctrine did apply because the funder and plaintiff “had a common interest in the successful outcome of the litigation.”

In In re International Oil Trading Company (Bankr. S.D. Fla. 2016), the court protected documents shared between a claimant and a funder, concluding that the essential element of the common interest exception was satisfied because the funding agreement contained a confidentiality provision and the parties shared a genuine common enterprise.

Attorney-Client Privilege

The attorney-client privilege is the weakest protection for litigation funding documents. Because a litigation funder is not the client, sharing privileged information with a funder generally waives the privilege.

In Finjan v. SonicWall (N.D. Cal. 2020), the court declined to apply attorney-client privilege because the plaintiff’s voluntary disclosure to a “third-party investor who merely observed its board meetings” waived whatever privilege otherwise attached. The Ninth Circuit reached a similar conclusion decades earlier in Liew v. Breen (9th Cir. 1981), holding that approaching an attorney “not for legal advice and assistance, but rather with the aim of finding meritorious litigation to finance” does not arise out of the attorney-client relationship.

Mistakes to Avoid

Handling litigation funding discovery incorrectly can have serious consequences — from waiving privilege protections to losing strategic advantage. Here are the most common mistakes parties make.

1. Sharing documents with funders without a non-disclosure agreement.
This is the biggest mistake. Courts have consistently looked at whether a confidentiality agreement was in place when deciding if work product protection survives disclosure to a funder. In Miller v. Caterpillar, documents shared with funders without an NDA lost protection, while those shared under an NDA remained protected.

2. Disclosing attorney mental impressions to funders.
An attorney’s legal theories, case evaluations, and strategic analysis are opinion work product — the most protected category. Sharing these with a funder does not automatically waive protection, but it creates risk. The ABA has recommended that attorneys should only provide funders with publicly available documents and avoid sharing opinions about the underlying claims.

3. Assuming funding is always irrelevant to the case.
While many courts treat funding as a “side issue,” others disagree — especially in patent cases, class actions, and cases involving fraud allegations. Attorneys should be prepared to defend the relevancy objection with specific case law that applies to their jurisdiction.

4. Failing to check local rules before filing.
Parties who file in the District of New Jersey, the District of Delaware, or any district with specific disclosure requirements and fail to comply face motions to compel, sanctions, and adverse inferences. Check the local rules of your specific court before filing.

5. Relying on the common interest privilege alone.
Because courts are split on whether the common interest doctrine protects funder communications, parties should not rely on it as their sole protection. The work product doctrine is a much stronger and more widely recognized shield.

6. Not asserting privilege when discovery is sought.
In Gbarabe v. Chevron, plaintiff’s counsel did not assert that the funding agreement was privileged. The court noted this failure and ordered production. Had counsel asserted work product protection, the outcome may have been different. Always raise privilege objections promptly and specifically.

Do’s and Don’ts for Parties With Litigation Funding

Do’s

• Do execute a written NDA with every funder before sharing any case information. Courts consistently look for this.
• Do limit what you share to factual, publicly available information whenever possible.
• Do maintain a privilege log for all documents shared with funders so you can assert protections if challenged.
• Do check the local rules and standing orders of your specific court for any disclosure requirements.
• Do prepare to explain why funding documents are irrelevant if the opposing party seeks discovery.

Don’ts

• Don’t share attorney mental impressions, legal theories, or settlement strategy with a funder unless absolutely necessary.
• Don’t assume the attorney-client privilege will protect documents shared with funders — it almost certainly will not.
• Don’t ignore disclosure deadlines if you are in a jurisdiction with mandatory disclosure (such as New Jersey or Delaware).
• Don’t agree to funder control over settlement decisions. This creates a direct pathway for the opposing party to argue the funder is the “real party in interest.”
• Don’t wait until a motion to compel is filed to organize your privilege assertions. By then, it may be too late.

Pros and Cons of Litigation Funding Disclosure

Pros of Disclosure

• Transparency. Courts, opposing parties, and juries understand who is involved in the case and what interests are at play.
• Conflict detection. Disclosure helps judges identify whether a funder has a relationship with any party that could create a conflict of interest or warrant recusal.
• Protecting class members. In class actions, disclosure ensures that class counsel is not putting the funder’s interests above those of the class.
• National security. Disclosure prevents foreign governments and sovereign wealth funds from secretly funding litigation against American companies.
• Deterring abuse. When funding arrangements are visible, funders and attorneys are less likely to engage in practices that prioritize profits over client interests.

Cons of Disclosure

• Chilling effect. Broad disclosure requirements may discourage the use of litigation funding, reducing access to justice for plaintiffs who cannot afford to litigate without financial help.
• Strategic disadvantage. Disclosure reveals a plaintiff’s financial position and, potentially, the funder’s assessment of case value — giving defendants an unfair negotiating advantage.
• Discovery abuse. Defendants may use funding discovery as a delay tactic, increasing costs and prolonging litigation.
• Privacy concerns. Funding terms involve confidential financial information that is not relevant to the merits of most cases.
• No reciprocal requirement. There is generally no requirement for defendants to disclose their litigation budgets or insurance arrangements beyond what FRCP 26(a)(1)(A)(iv) already requires for insurance agreements.

Key Court Cases Recap

These rulings illustrate how courts across the country have handled the discoverability question in different contexts.

Lituma v. Liberty Coca-Cola Beverages (N.Y. App. Div. 2026) — The First Department affirmed the first-ever appellate order in New York directing disclosure of litigation funding in a personal injury case. The defendants alleged the plaintiffs were part of a fraud ring involving staged car accidents, and the court held the funding information was “material and necessary.”

Burkhart v. Genworth Financial (Del. Ch. 2024) — The Delaware Court of Chancery ordered production of litigation funding agreements in a class action, finding that the presence of funders created potential conflicts of interest between class counsel and the class. This was the fourth Delaware state court decision holding such agreements discoverable.

In re Valsartan (D.N.J. 2019) — The court denied carte blanche discovery of litigation funding, calling it a “side issue” irrelevant to whether the defendants’ drug contamination caused injuries. However, the court left the door open for future discovery upon a showing of “good cause.”

Miller UK v. Caterpillar (N.D. Ill. 2014) — The court protected litigation funding documents under the work product doctrine because the plaintiff maintained NDAs with its funders. This case established the principle that forcing a litigant to choose between capital and confidentiality would be “ridiculous.”

Gbarabe v. Chevron (N.D. Cal. 2016) — The court granted discovery of a funding agreement in a class action, but the circumstances were unusual. Plaintiff’s counsel conceded funding was relevant to the adequacy inquiry and did not assert privilege. Legal commentators have described this case as an “outlier” rather than a broad precedent.

Kaplan v. S.A.C. Capital Advisors (S.D.N.Y. 2015) — Despite the plaintiff’s admission that a third party was funding the case, the court denied discovery because speculative concerns about conflicts of interest were not enough. The plaintiff’s counsel chose not to assert privilege, but the court did not need to reach the issue because it found the documents irrelevant.

FAQs

Are litigation funding agreements always discoverable?
No. Discovery depends on the jurisdiction, the type of case, and whether the requesting party demonstrates specific relevance to a claim or defense.

Do I have to disclose litigation funding without being asked?
Yes, if you are in a state like Wisconsin, Montana, or West Virginia, or a federal court with local rules requiring disclosure such as the District of New Jersey.

Can the work product doctrine protect my funding agreement?
Yes. Most courts protect funding documents under the work product doctrine, especially when a non-disclosure agreement is in place between the plaintiff and funder.

Does sharing documents with a funder waive attorney-client privilege?
Yes, in most cases. Funders are not clients, so disclosing privileged information to them typically waives the attorney-client privilege.

Are funding agreements more likely to be discoverable in patent cases?
Yes. Courts have recognized that funding documents in patent cases often contain relevant patent valuations, plaintiff statements, and information bearing on damages.

Can a defendant force a plaintiff to reveal the funder’s identity?
No, not automatically. The defendant must show specific relevance, such as evidence of a conflict of interest, funder control over litigation, or a fraud allegation.

Does the common interest doctrine protect funder communications?
No, not reliably. Courts are split, with some rejecting the argument because a funder’s interest is financial — not legal — and therefore does not qualify.

Is there a federal law requiring disclosure of litigation funding?
No, not yet. Proposed legislation such as the Litigation Transparency Act has been introduced but has not been enacted as of early 2026.

Can a funder be held liable for malicious prosecution?
Yes. A California appellate court held in Kay v. Lesches (2024) that a funder can be liable if it “surreptitiously caused a front man to institute a lawsuit.”

Are foreign-funded lawsuits treated differently?
Yes. Multiple states including Arizona, Colorado, and Montana have passed laws specifically restricting or requiring disclosure of funding by foreign entities of concern.

Does litigation funding affect class certification?
Yes. Courts have found that funding arrangements are relevant to determining whether class counsel can adequately represent the class without being conflicted by a funder’s interests.

Should I use an NDA with my litigation funder?
Yes. A written non-disclosure agreement is the single most important step for preserving work product protection over documents shared with a funder.