Relates to the disclosure of third-party consumer litigation financing agreements in which there is a right to receive compensation or proceeds from the consumer that is contingent on and sourced from any proceeds of the civil action, by settlement, judgment, or otherwise.
Summary
A07599, titled the “sunshine in lawsuit funding act,” would amend New York’s Civil Practice Law and Rules to require disclosure of certain third-party litigation financing agreements in civil cases. Under the bill, a consumer or the consumer’s legal representative would have to provide, without waiting for a discovery request, any litigation funding contract or agreement to all parties to the case, including an insurer if the funding exists before litigation begins. The disclosure requirement applies to arrangements where a non-lawyer has a right to receive compensation or proceeds contingent on the outcome of the civil action.
The bill also makes the existence of litigation funding, and all participants in those arrangements, permissible subjects of discovery in personal injury litigation and related matters, including wrongful death cases and cases involving infants or judicially declared incapacitated persons. It would take effect 30 days after becoming law.
Impact
If enacted, the bill would add new Rule 3120-a to the CPLR and expand discovery obligations in personal injury and related civil actions. It would affect consumers who use third-party lawsuit funding, litigation funders, plaintiffs’ attorneys and legal representatives, insurers, and other parties to civil litigation by requiring early disclosure of funding terms and participants. The measure is aimed at increasing transparency around lawsuit financing and would create a new statutory basis for obtaining information about these agreements in discovery.
Sentiment
The available record shows no committee transcript or recorded votes, so there is no documented floor or committee debate to gauge broad sentiment. Based on the bill text and caption, the measure appears to be framed as a transparency reform, suggesting support from those concerned about hidden litigation financing arrangements and potential influence on civil claims. At the same time, the absence of recorded discussion means opposition or support cannot be confirmed from the provided materials.
Contention
The main point of contention is likely the scope of mandatory disclosure and discovery into private litigation funding arrangements. Supporters would likely argue that early disclosure promotes transparency, helps insurers and defendants assess claims, and prevents undisclosed outside interests from influencing litigation. Opponents may argue that the bill intrudes on confidential financing arrangements, could chill access to funding for injured consumers, and may give defendants strategic leverage by exposing plaintiffs’ financial backing and litigation strategy. No specific legislators or stakeholder groups are identified in the provided record.