First of its Kind Wisconsin Law Requires More Transparency From Third Party Litigation Funders
Wisconsin now requires plaintiffs in civil action lawsuits to disclose any third-party litigation funding deals. The U.S. Chamber Institute for Legal Reform called the law, which was signed on April 3rd, as “groundbreaking.” According to ILR, Act 235 is the first of its kind, making Wisconsin the only state with such a law.
Supporters say litigants have a right to know if a third party will benefit from a settlement in a case. Third-party litigation funding became a hot button issue after it was discovered Silicon Valley billionaire Peter Thiel had secretly funded Hulk Hogan’s lawsuit against the tabloid website, Gawker. Opponents say disclosure of funding deals don’t determine the outcome of a lawsuit.
Burford Capital, the biggest commercial litigation finance company in the country, told The ABA Journal in a statement, “Most states have been diligent to draft new laws that clearly separate consumer and commercial litigation finance,” “In its haste to pass a consumer law, however, Wisconsin did not do so, despite there being no expressed desire to regulate commercial litigation finance. We view this as an accidental outlier that is likely to change in due course once Wisconsin businesses realize that their legislators just overreached."