While litigation funding has been a great boost to those seeking access to justice, the system is not without its critics or those who have raised concerns. One area that has recently come under the spotlight is the issue of transparency in funding. Some commentators in the US are comparing this to the lack of transparency in US political donations.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
While litigation funding has been a great boost to those seeking access to justice, the system is not without its critics or those who have raised concerns. One area that has recently come under the spotlight is the issue of transparency in funding. Some commentators in the US are comparing this to the lack of transparency in US political donations.
Writing for Tuscon, Xavier Segura, a legal scholar and higher education professional, suggests that not only is the lack of transparency an issue in and of itself, it could lead to conflicts of interests between judges who unknowingly have a financial interest in cases they are overseeing. He goes on to speculate that this could also impact national security matters, noting the presence of sovereign wealth funds and state-backed entities in litigation finance; he raises the concern that they could be funding cases to litigate against key national security priorities.
As a solution to this issue, Segura argues for voters and legislators to support the Litigation Funding Transparency Act (LFTA), a bill in the US House of Representatives. This legislation would not only require disclosure of the presence of funding agreements, but also make the names of funders publically available. Many litigation funding industry participants have categorized the LFTA as legislative overreach, and a solution in search of a problem. The bill continues to languish in Congress, with no clear momentum at this time.
