2025 Transportation Law Compendium: Plaintiff Funding & Medical Networks Question 1

Alabama courts have not addressed the discoverability of documents relating to third-party litigation funding. However, the Alabama Court of Civil Appeals has recognized that third-party litigation funding agreements violate public policy because they are akin to gambling contracts, which are illegal in Alabama.  Wilson v. Harris, 688 So. 2d 265, 270 (Ala. Civ. App. 1996) (holding such an agreement is “opposed to the public interest because it condones speculation in litigation, makes sport of the judicial process, and tempts the unscrupulous to prey upon the distress of the ignorant and unfortunate.”). Likely as a result of the Court’s holding in Wilson, third-party litigation funding is not prevalent in Alabama, though the Alabama legislature has yet to specifically address the practice. 

Alabama courts have not addressed the discoverability of documents relating to third-party litigation funding. However, the Alabama Court of Civil Appeals has recognized that third-party litigation funding agreements violate public policy because they are akin to gambling contracts, which are illegal in Alabama.  Wilson v. Harris, 688 So. 2d 265, 270 (Ala. Civ. App. 1996) (holding such an agreement is “opposed to the public interest because it condones speculation in litigation, makes sport of the judicial process, and tempts the unscrupulous to prey upon the distress of the ignorant and unfortunate.”). Likely as a result of the Court’s holding in Wilson, third-party litigation funding is not prevalent in Alabama, though the Alabama legislature has yet to specifically address the practice. 

In Alaska, the discoverability of third-party litigation funding is not governed by a specific statute or rule requiring automatic disclosure. However, case law and general discovery principles under Alaska’s Rules of Civil Procedure do allow for the possibility of discovery in certain circumstances.

Change in Law – Effective December 31, 2025 – Senate Bill 1215

Title 12 of the Arizona Revised Statutes will be amended to include Chapter 28 “Litigation Financing”. The Chapter bars financiers from influencing case decisions, legal strategy, attorney selection or settlements.

Timing of Disclosure: A.R.S. 12-3454 “Required Disclosures” – Requires that a party to an action, without waiting for a discovery request and within thirty days after commencement of the action, disclose the following:

1. Whether the party, or its counsel, has entered into a litigation financing agreement; and
2. The name of the financier.

This is a continuing obligation that is triggered with a new agreement or an amendment to a preexisting agreement.

Change in Law – Effective January 1, 2026 – Amendment to Arizona Code of Civil Procedure, Rule 8 Ariz. R. Civ. P.

Rule 8 will be amended to include Rule 8(j) “Third-Party Litigation Funding Agreements”.

Timing of Disclosure: Rule 8(j)(1) – A party subject to a third-party litigation funding agreement must file a certificate regarding the agreement at the time of filing the initial pleading.

This is a continuing obligation, if the party becomes subject to an agreement after the filing of the initial pleading, the party must file the certificate within 7 days of the agreement and serve a copy to all parties.

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In California, there is a distinction between litigation funding and medical factoring companies.

With regard to litigation funding, if a plaintiff attorney secures third-party litigation funding on behalf of a client, any information and communication regarding third-party litigation funding is considered confidential and non-discoverable. 

California has no law against champerty which would invalidate a third-party litigation loan (Estate of Cohen (1944) 66 Cal. App. 2d 450,458). In a recent opinion of the Standing Committee on Professional Responsibility and Competence (Formal Opinion No. 202-204), the State Bar of California advises that litigation-funding loans are permitted, so long as the attorney maintains client confidentiality. Communications between plaintiff’s counsel and the third-party litigation loan originator fall under the protection of Evidence Code section 952. Section 952 renders confidential any communication necessary to advance the client’s interests, even when third parties are part of the communication.  (De Los Santos v. Superior Ct. (1980) 27 Cal. 3d 677,683.)

Regarding factoring companies, there is a growing trend in California whereby a surgeon and surgery center will perform surgery on a plaintiff-patient on a medical-legal lien basis.  These lien-based medical bills are always far in excess of medical community standards. Generally speaking, a defendant is entitled to discovery into whether a plaintiff treated on a lien-basis and can then discover the lien agreement.  Sometimes, a financial factoring company will then purchase the medical-legal lien at a steep discount from the surgeon and surgery center. In exchange, the surgeon and surgery center will then “assign” the lien to the factoring company.  The factoring company then stands in the shoes of the surgeon and surgery center for the full amount of the lien and usually will not compromise the lien. The defense may be permitted to discover the amount paid by the factoring company to the surgeon and surgery center – this seems to be on a case-by-case basis.  However, at trial, plaintiff’s counsel can “black-board” the full amount of the medical lien before the jury, and any reference to what the factoring company paid is inadmissible if the plaintiff remained liable for the full incurred amount.  (Katiuzhinsky v. Perry (2007) 152 Cal.App. 4th 1288.) 

Litigation funding is not discoverable in Colorado.

Discovery of Third-Party funding is permissible in Connecticut.

Third-party funding is generally not discoverable under Delaware law as it is covered by Delaware’s work product doctrine. See Carlyle Inv. Mgmt. L.L.C. v. Moonmouth Co. S.A., 2015 WL 778846 at *9 (Del. Ch. 2015).

While there have been no cases or specific rules or statutes on the issue of third-party litigation financing, one assumes that in the normal course of discovery, this would be discoverable pursuant to District of Columbia Civil Rule 26(b)(4).

There is no bright-line rule in place in Florida, and these issues continue to be addressed on a case-by-case basis focusing on why the information is being requested. Federal courts seem more open to requiring disclosure than our state courts.

• Northern District of Florida Judge Casey Rodgers recently required all plaintiffs in a MDL to disclose third-party litigation funding. In re Depo-Provera Depot Medroxyprogesterone Acetate Prods. Liab. Litig., No. 3:25-md-3140, 2025 U.S. Dist. LEXIS 127535 (N.D. Fla. July 1, 2025)
• The Southern District of Florida has previously ordered the production of a litigation funding agreement in a patent infringement matter. Cobra Int’l v. Bcny Int’l, Inc., No. 05-61225-CIV-MARRA/MATTHEWMAN, 2013 U.S. Dist. LEXIS 190268 (S.D. Fla. Nov. 4, 2013).
• Florida intermediate court of appeals granted certiorari to quash a trial court order requiring disclosure of the names of individual contributing to a “litigation fund” in lawsuit against a city challenging a zoning issue. Matthews v. City of Maitland, 923 So. 2d 591 (Fla. 5th DCA 2006) (“The compelled disclosure of the names of citizens exercising their right to participate in the democratic process would create a chilling effect on their rights to organize and associate.”); see also Estate of McPherson v. Church of Scientology Flag Serv. Org., 815 So. 2d 678 (Fla. 2d DCA 2002) (granting certiorari to quash trial court order compelling documents regarding payments of plaintiff’s legal expenses in wrongful death suit).

As of the enactment of Georgia Senate Bill 69 on April 21, 2025, the terms and existence of certain litigation financing agreements are discoverable.[i] However, the agreements and information therein are not necessarily admissible simply because they are discoverable.[ii]

Furthermore, the newly enacted legislation established regulations for litigation financing companies, which provide funding agreements to plaintiffs and claimants to finance their litigation in return for a fee.[iii] Of note, the legislation requires litigation financers to register with the Georgia Department of Banking and Finance and disclose pertinent information regarding affiliated individuals and entities.[iv] The legislation also prohibits litigation financers from directing the litigation strategy and from receiving more from the agreement than the plaintiff or claimant recovers.[v] In addition, the legislation establishes that the litigation financer may be jointly and severally liable for sanctions and costs imposed by the Court, and creates criminal liability for litigation financers who do not abide by the terms of the applicable statutes.[vi]

[i] O.C.G.A. § 9-11-26(b)(2.1)(A).

[ii] O.C.G.A. § 9-11-26(b)(2.1)(B).

[iii] See O.C.G.A. §§ 7-10-1 to 11.

[iv] O.C.G.A. § 7-10-2.

[v] O.C.G.A. § 7-10-4; O.C.G.A. § 7-10-6.

[vi] O.C.G.A. § 7-10-5.

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As Idaho law does not directly address the discoverability or disclosure of third-party litigation funding, any such information will be subject to Idaho Rule of Civil Procedure 26, which governs the scope of discovery, and Idaho Rule of Evidence 401, which defines relevance. In Idaho, “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense,” including discovery that may not be admissible at trial, but is “reasonably calculated to lead to the discovery of admissible evidence.”[i] Under certain circumstances, there may be arguments available that third-party funding sources are discoverable to show bias or interest in the outcome of proceedings, as discoverable collateral source payments,[ii] or based on considerations of fairness and judicial economy.[iii]  

[i] Idaho R. Civ. P. 26(b)(1)(A).

[ii] Idaho Code § 6-1606.

[iii] See Edmunds v. Kramer, 142 Idaho 867, 873, 136 P.3d 338, 344 (2006) (“The purpose of our discovery rules is to facilitate fair and expedient pretrial fact gathering.”)

The issue of whether third-party litigation funding is discoverable in Illinois has not been directly addressed but is governed by the discovery rules and informed by relevant federal caselaw. Illinois discovery rules permit the discovery of any matter that is relevant to any claim or defense and not privileged.  Ill. R. Civ. Proc. 201. Caselaw to indicate any exception to that rule with regard to third-party litigation funding is lacking. However, federal courts situated in Illinois have found limitations as to discoverability, which could potentially shape Illinois law going forward.  First, in Miller UK Ltd. v. Caterpillar, Inc., 17 F. Supp. 3d 711, 742 (N.D. Ill. 2014), the court ruled against the discoverability of a number of documents from a third-party funder, including “the amount of money sought or received . . . the details of the agreement . . . or how much the funder will receive if [plaintiff] wins the case” as they were irrelevant to the claims and defenses at issue.

While the mere fact that a party is receiving third-party funding could be discovered by an opponent in litigation pursuant to the discovery rules, there is potential for Illinois courts to find a violation of privilege if a party ventures too far into certain communications with the funder. The court in Miller acknowledged that third-party funding agreements are generally intended to be confidential, as disclosure would discourage such funding.  Id. at 738.  The work-product doctrine has also been cited in opposition to the notion of obtaining documents relating to the litigation from a third-party funder, as this privilege can easily be violated, and the turning over of privileged documents in breach of a written confidentiality agreement would harm the funder’s ability to “attract clients.” Doe v. Soc’y of the Missionaries of the Sacred Heart, 2014 U.S. Dist. LEXIS 60799, *12 (N.D. Ill. 2014).  Discoverability is thus limited by the constraints of the discovery rules, but litigants should pay special attention to privilege issues.

The funding agreement is discoverable subject to certain disclosure requirements. The discoverability of third-party litigation funding in the State of Indiana is outlined under Indiana’s Civil Proceeding Advanced Payments (“CPAP”) statute 24-12-11-5.

• Under this statute, the contents of a commercial litigation agreement are subject to discovery under the Indiana Rules of Trial Procedure by any party or an insurer that has a duty to defend another party in the civil proceeding.
• If the agreement includes a “foreign person,” the plaintiff or his attorney must provide each party [or insurer with a duty to defend a party] written notice that the Plaintiff has entered into such an agreement “within a reasonable time” after entering into the agreement.  

There is no rule either explicitly permitting or prohibiting third-party litigation funding in Iowa. In 2022, the Iowa legislature proposed a bill that would have prohibited litigation funding contracts. See S.F. 2085, 89th Gen. Assemb., Reg. Sess. (Iowa 2022). However, the bill did not receive committee approval and, as a result, did not move to the floor for full debate. Iowa state courts are similarly silent as to discovery of third-party litigation funding files.

However, related federal case law sheds light on the parameters of discovery applicable to third-party litigation funding files. In Nunes v. Lizza, the Northern District of Iowa was faced with a motion to compel third-party litigation funding discovery requests. See No. 20-cv-4003-CJW, 2021 WL 7186264, at *1 (N.D. Iowa Oct. 26, 2021). It held that “‘courts across the country . . . have held that litigation funding information is generally irrelevant to proving the claims and defenses in a case.’” Id. at *3 (quoting Fulton v. Foley, No. 17-CV-8696, 2019 WL 6609298, at *2 (N.D. Ill. Dec. 5, 2019)). Yet, “‘[d]iscovery into litigation funding is appropriate when there is a sufficient factual showing of “something untoward” occurring in the case.’” Nunes, 2021 WL 7186264, at *4 (quoting V5 Technologies v. Switch, Ltd., 334 F.R.D. 306, 311-12 (D. Nev. 2019)). Based on these holdings, the court in Nunes performed a case-specific analysis and ultimately permitted discovery (subject to in camera inspection) as the defendants “raise[d] legitimate subjects for inquiry not present in a more run-of-the-mill personal injury case or commercial dispute.” Nunes, 2021 WL 7186264, at *4.

Under Iowa federal law, all parties are required to file Disclosure Statements at the outset of a case. See N.D. Iowa L.R. 7.1 (2024); S.D. Iowa L.R. 7.1 (2024). These Disclosure Statements require parties to disclose (1) “the names of all associations, firms, partnerships, corporations, and other artificial entities that either are related to the [party] as a parent, subsidiary, or otherwise, or have a direct or indirect pecuniary interest in the [party’s] outcome in the case;” and (2) “with respect to each such entity, a description of its connection to or interest in the litigation.” Id. This requirement would arguably include the disclosure of third-party entities who fund a party’s litigation. Therefore, discovery of the “identity” of third parties who fund litigation, and their “connection” to the case, is arguably mandated in Iowa federal courts. At this time, it appears that Nunes v. Lizza is the sole guidance discussing the extent to which parties may discover additional information regarding third-party litigation funding.

Several bills were proposed during the 2025 legislative session, but none of the bills were passed. We anticipate that bills addressing litigation funding will be introduced again during the 2026 legislative session.

In Kansas, if a party has entered into a third-party litigation funding agreement, such party shall deliver to all parties a sworn statement meeting six disclosure requirements within 30 days after commencement of the legal action or 30 days after execution of such third-party litigation funding agreement, whichever is later. See K.S.A. § 60-226. The sworn statement must disclose:

• The identity of all contracting parties;
• Whether a third-party funder is granted control or approval rights with respect to litigation or settlement decision;
• Whether a third-party funder is granted the right to receive materials designated as confidential;
• The existence of any known relationship between a third-party funder and the adverse party, adverse party’s counsel, or the court;
• A description of the nature of the financial interest; and
• Whether any foreign person from a foreign country of concern is providing funding for the funding agreement.

Kentucky courts have not directly addressed the issue of the discoverability of third-party litigation funding files. The discovery of third-party litigation funding files is subject to Kentucky Rule of Civil Procedure 26.02(1). Pursuant to CR 26.02(1), discovery is limited to “any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party[.]”

In Combs v. Bridgestone Ams., Inc., No. 2:22-CV-00130-DCR-EBA, 2023 U.S. Dist. LEXIS 233193, at *20–*21 (E.D. Ky. Nov. 27, 2023), the Court, while applying the federal counterpart of CR 26.02(1),  held that information pertaining to a third-party litigation company’s monthly payments of living expenses to the plaintiff was relevant and discoverable because those monthly payments could reasonably bear on the amount of damages at issue in the case. The Court also concluded that agreements between the third-party litigation company and any of plaintiff’s medical providers were discoverable because those agreements would be relevant to the providers’ bias and credibility. Id. at *22.

Neither the Kentucky Court of Appeals nor the Supreme Court of Kentucky has addressed whether third-party litigation funding agreements violate KRS 372.060, Kentucky’s champerty statute, which voids any contract or agreement to provide funding for another party’s case in exchange for the proceeds or any portion thereof. In Boling v. Prospect Funding Holdings, LLC, the Sixth Circuit Court of Appeals predicted that the Kentucky Supreme Court would most likely hold that such agreements would violate KRS 372.060 and that such agreements would be inconsistent with Kentucky’s public policy. 771 Fed. Appx. 562, 581-82 (6th Cir. 2019).

Yes, the litigation/medical funding agreements are discoverable.  However, most often, securing the funding documents requires overcoming numerous objections from the funding companies, plaintiff’s counsel, and the doctors who have contracted with the companies.

La R.S. § 9:3580.10 et. seq., which is known as the laws on “Transparency and Limitations on Foreign Third-Party Litigation Funding” and “Litigation Financing Disclosure Act” has set forth new rules and regulations regarding third party funding companies. In instances where a litigation funding or financing agreement is in place, (1) the entity cannot dictate any decisions on the matter and (2) the agreement is discoverable in the litigation.

Under the “Transparency and Limitations on Foreign Third-Party Litigation Funding” laws, for any non-domestic entity whose contract is contingent on the outcome of the litigation, the laws have mandatory disclosure requirements to the state attorney general and prohibits certain terms in such agreement for contingent outcomes. Additionally, it bans funders from directing lawyers and parties on how to pursue suits, including whether to settle.

Under this law, Third-Party Litigation Funding Companies must:

• Disclose in writing to the attorney general the name, the address, and citizenship or the country of incorporation or registration of any foreign entity that has a right to receive or obligation to make any payment that is contingent  on the outcome of the civil action, or portfolio that includes the civil action and involves the same counsel of record or affiliated counsel, by settlement, judgment, or otherwise.
• Disclose in writing to the attorney general the name, address, the citizenship or the country of incorporation or registration of any foreign entity that has received or is entitled to receive proprietary information or information affecting national security interests obtained as a result of the funding agreement for such civil action. This disclosure does not pertain to information received by a party to the action, counsel of record, or law firm of record.
• Produce to the attorney general a copy of any agreement creating a contingent right described above.
• The disclosure and certification required by this shall be made no later than thirty days after execution of any agreement or the date on which the civil action is filed.

If the Third-Party litigation funding company is a domestic company, these aforementioned laws do not apply.

La R.S. § 9:3580.3 established the “Litigation Financing Disclosure Act” which does not limit its application to foreign companies/actors. This Act prohibits the financing companies from deciding, influencing, or directing the party(ies) and attorney(s) handling of the litigation. Further, this act makes the agreements discoverable.

It is Justice/Judge dependent and based upon the Court’s individual decisions.

Maryland state courts have yet to address the issue of third-party litigation financing. The general rules of discovery set forth in the Maryland Rules of Civil Procedure would likely govern, at this point, whether third-party litigation funding files are discoverable. Maryland Rule 2-401 provides that a party may obtain discovery of any matter relevant to the subject matter involved in the pending action. Maryland Rule 2-402 provides that Courts may require nondisclosure of relevant information, which may include the existence of a funding agreement or its terms.

In the Federal Court in Maryland, the Federal Local Rule is “[w]hen filing an initial pleading… counsel shall file a statement (separate from any pleading) containing…[t]he identity of any corporation, unincorporated association, partnership, or other business entity, not a party to the case, which may have any financial interest whatsoever in the outcome of the litigation, and the nature of its financial interest.”[i] 

Likewise, the Local Rule in Federal Court is that “[a] party…must identify any publicly held corporation, whether or not a party to the present litigation, that has a direct financial interest in the outcome of the litigation by reason of a…profit sharing agreement…or state that there is no such corporation.”[ii] 

Recently, in In re Sanctuary Belize Litig., the U.S. District Court in Maryland found that, after reviewing a litigation financing agreement between a commercial litigation finance firm and a formerly pro se Plaintiff, that the information was discoverable and that “any term sheet and any further litigation financing agreement” had to be turned over as part of the litigation.[iii] 

[i] D. Md. L.R. 103.3(b).

[ii] 4th Cir. L.R. 26.1(a)(2)(B).

[iii] In re Sanctuary Belize Litig., 2021 WL 2875508, at *2 (D. Md. July 8, 2021).

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Currently, Michigan has no court rule or case law on the discoverability of third-party individuals and/or corporations who fund litigation.

Michigan follows the open, broad discovery policy, permitting liberal discovery.[i] However, “Michigan’s commitment to open and far-reaching discovery does not encompass fishing expeditions.”[ii]

Courts may consider the discoverability of third-party litigation funding if relevant to factors such as control over litigation or settlement decisions, conflicts of interest or not promoting or protecting the interests of the actual, vested party.

“Parties may obtain discovery regarding any non-privilege matter that is relevant to any party’s claims or defenses and proportional to the needs of the case, taking into account all pertinent factors, including whether the burden or expense of the proposed discovery outweighs its likely benefit, the complexity of the case, the importance of the issues at stake in the action, the amount in controversy, and the parties’ resources and access to relevant information. Information within the scope of discovery need not be admissible in evidence to be discoverable.”[iii]

[i] Reed Dairy Farm v Consumers Power Co, 227 Mich App 614, 616 (1998).

[ii] Augustine v Allstate Ins Co, 292 Mich App 408, 419-420 (2011).

[iii] Civil Proceedings Benchbook, Ch. 5: Discovery in General (www.courts.michigan.gov) 

Minnesota courts have yet to rule on the discoverability of third-party litigation funding. In 2020, the Minnesota Supreme Court abolished Minnesota’s 120-year-old prohibition against champerty, thereby permitting litigants’ use of third-party litigation funding throughout the state.[i] Although the case opened the door for third-parties to fund litigation in Minnesota, the court did not explicitly address the discoverability of such funding. Since the Maslowski decision, other Minnesota courts have also not addressed the discovery of third-party litigation funding.

On March 24, 2025, the Minnesota state senate introduced bill SF 2929, also known as the Consumers in Crisis Protection Act, which attempts to codify the disclosure of third-party litigation funding by stating, “[c]onsumer litigation financing agreements and all participants or parties to consumer litigation financing agreements are permissible subjects of discovery in a legal claim.”[ii] The senate recently referred the bill to Minnesota’s Commerce and Consumer Protection Committee for further consideration.[iii]

[i] Maslowski v. Prospect Funding Partners LLC, 944 N.W.2d 235 (Minn. 2020).

[ii] 2025-2026 Leg., 94th Sess., § 45B.06, subd. 1(b) (Minn. 2025); See also id., at § 48B.13, subd. 1 & 2.

[iii] SF 2929, Status in the Senate for the 94th Legislature (2025 – 2026), https://www.revisor.mn.gov/bills/bill.php?b=senate&f=SF2929&ssn=0&y=2025 (last accessed August 21, 2025).

There is no clear answer in Mississippi; however, the argument supporting discovery is that the third-party funding agreement may be relevant to attack the bias, credibility and motivation of the provider. Woulard v Greenwood Motor Lines, 2019 WL 3311752 (S.D. Miss. 2/4/2019). Discovery of a third-party litigation funding agreement is broader than admissibility at trial.

The Missouri legislature recently enacted the Consumer Legal Funding Act, Mo. Rev. Stat. §§ 436.550–.572. Under Mo. Rev. Stat. § 436.572, “[a] consumer legal funding contract is a fact subject to the usual rules of discovery.” Additionally, Mo. Rev. Stat. § 436.568 provides as follows:

No communication between the consumer’s attorney in the legal claim and the consumer legal funding company necessary to ascertain the status of a legal claim or a legal claim’s expected value shall be discoverable by a party with whom the claim is filed or against whom the claim is asserted. This section does not limit, waive, or abrogate the scope or nature of any statutory or common-law privilege, including the work-product doctrine and attorney-client privilege.

Missouri courts have not interpreted the Consumer Legal Funding Act or addressed the discoverability of third-party litigation funding. However, opponents to discovery requests regarding third-party litigation funding will likely rely on arguments regarding relevance and the work-product doctrine. See, e.g., Morley v. Square, Inc., 2015 WL 7273318 at *2–3 (E.D. Mo. Nov. 18, 2018) (concluding that information regarding third-party litigation funding was protected by the work-product doctrine). 

There is currently no precedent in Montana for discovery of 3^rd party litigation funding, and thus approaches may vary from venue to venue within Montana. An argument would exist for discoverability if the result was that part of the billed amount of the medical expenses were written off, that should be discoverable under Mont. Code Ann. Sec. 27-1-308.

Also, Defendants should be aware of Montana law related to prepayment of medical expenses. Under Montana law, where liability is reasonably clear, and it is reasonably clear that the expenses is caused by the accident then the Defendant must prepay those expenses. Given that law, the use of 3^rd party medical funding is not too prevalent in Montana.

Nebraska courts have not yet specifically addressed whether third party litigation funding files are discoverable, thus discovery of third-party funding is likely subject to the general rules of discovery under Neb. Rev. Stat. § 6-326. Nebraska’s Legislature has also not passed any laws mandating or prohibiting disclosure of those files. We would therefore expect our courts to look to federal decisions for guidance on this issue. See, e.g., Nunes v. Lizza, No. 20-CV-4003-CJW, 2021 WL 7186264, at *3 –*6 (N.D. Iowa Oct. 26, 2021) (noting that “[a]s a general matter, courts across the country that have addressed the issue have held that litigation funding information is generally irrelevant to proving the claims and defenses in a case[]” but stating that “there is no bright-line prohibition on such discovery”); Morley v. Square, Inc., No. 4:10CV2243 SNLJ, 2015 WL 7273318, at *3 (E.D. Mo. Nov. 18, 2015).

During the 2025 legislative session, LB199 was introduced, which would have mandated disclosure of litigation financing within 30 days of a request. However, the bill did not advance through the legislative process. Furthermore, there has been indication that Nebraska’s congressional delegation would support the implementation of the Litigation Funding Transparency Act, which would require third party litigation funding arrangements to be disclosed in federal litigation.

Finally, the Nonrecourse Civil Litigation Act regulates third party litigation funding. See Neb. Rev. Stat. § 25-3301, et seq. Section 25-3303 provides that “[a]ll contracts for nonrecourse civil litigation funding” must comply with numerous “requirements,” such as disclosure and acknowledgement provisions as well as actual terms themselves. See Neb. Rev. Stat. § § 25-3303(1)(a)–(v), (b); Neb. Rev. Stat. § 25-3304 (setting forth several “prohibited acts” for civil litigation funding companies).

In Nevada, third-party litigation funding is generally not discoverable, although courts are split on the issue. Under Nevada Rule of Civil Procedure 26(b)(1), discovery is limited to nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case. The party opposing discovery bears the burden of showing that the information sought is not relevant, which must be done by specifically detailing reasons why each request is improper. V5 Technologies v. Switch, Ltd., 334 F.R.D. 306, 309 (D. Nev. 2019).

Funding of Attorneys Fee 

Discovery into third-party funding of attorneys’ fees is generally not allowed prior to a determination of liability. As the Nevada court explained in V5 Technologies, a party’s entitlement to attorneys’ fees only arises if they prevail, so fee arrangements and funding sources are not relevant to the merits of the case at trial. Accordingly, these materials are not discoverable unless and until post-judgment fee motions are at issue. Id. at 311.

Communications with Funders

Under NRS 604C.240, any communication between a consumer’s attorney and a consumer litigation funding company related to the funding transaction is protected by the attorney-client privilege and the work-product doctrine. This means such communications are not discoverable in litigation

Identity of Funders

There is a nationwide split of authority as to whether the identity of a plaintiff’s litigation funder is discoverable. V5 Technologies,334 F.R.D. at 309. However, the Nevada federal court in V5 Technologies adopted the majority view that such information is not discoverable without a specific factual showing. Courts may permit discovery into third-party funding only where there is evidence of “something untoward,” such as:

• A non-party making ultimate litigation or settlement decisions,
• A conflict of interest involving the funder,
• Or the funder exerting control that compromises the plaintiff’s independent legal judgment.

Id. at 312 (quoting In re Valsartan NDMA Prods. Liab. Litig., 405 F. Supp. 3d 612, 615 (D.N.J. 2019)).

Speculation alone is insufficient. Courts require “objective evidence” that a funder’s involvement affects the fairness or integrity of the proceedings. Id. Moreover, while courts may be more receptive to such discovery where the funder is a potential witness or has a financial interest in a testifying party’s credibility, that determination must be grounded in facts, not assumptions.

There are no specific rules on obtaining discovery of third-party funding sources in New Hampshire.

• In 2021, the U.S. District Court for the District of New Jersey adopted Local Civil Rule 7.1.1, requiring disclosure of litigation funding arrangements in federal actions. Parties must identify the funder, disclose whether funder approval is necessary for litigation or settlement decisions, and provide a description of the funder’s interest. This represents a shift from prior practice, where funding information was not routinely discoverable absent good cause
• In contrast, the New Jersey Supreme Court’s Civil Practice Committee declined to adopt a similar rule for state court actions, citing insufficient experience with the issue. Accordingly, discoverability of third-party litigation funding remains unsettled in state practice and would proceed under traditional discovery rules.
• For litigants, the forum matters. In federal court, disclosure of litigation funding is routine and unavoidable. In state court, disclosure is uncertain and context-specific, which means parties may use discovery requests and objections as leverage.

The issue and question of the discoverability of third-party litigation funding is not well established in New Mexico at this time. While New Mexico courts engage in broad, liberal discovery and favor a “leave no stone uncovered” approach to discovery, the issue has not been broadly tested.

While the discoverability of third-party litigation funding information has yet to be substantively addressed by New York State’s appellate courts, trial courts in New York typically deny such requests, and deem them irrelevant to defendants’ defense as to liability and damages, and as to plaintiff’s credibility. Benitez v. Lopez, 2019 WL 1578167 (E.D.N.Y. 2019). In addition to relevancy, other factors considered by the Court include privilege and the specific facts of the case.

Currently, medical funding is not widespread in North Carolina and there are no specific rules or regulations governing the discovery of medical funding/factoring in North Carolina. However, it seems likely that if defense counsel is aware that Plaintiff is receiving medical funding, defense counsel should send specifically tailored discovery responses to elicit information and documents specific to the medical funding/factoring company files.  However, there are no appellate cases in North Carolina addressing the relevance and permissibility of such discovery.

Relevancy is the standard for discoverability in North Carolina, and if information about third-party funding is deemed relevant to a claim or defense, then it will likely be discoverable. Some examples of situations where third-party litigation funding may be deemed discoverable include: 

• “David vs. Goliath” narrative where Plaintiff portrays themselves as an “everyman” against a wealthy corporation, a defendant may seek discovery to reveal third-party funding and counter that narrative.

• Conflicts of interest on the part of lawyers and judges, although North Carolina ethics rules prohibit lawyers from investing in feeder funds for third-party litigation funding if the investment compromises the professional responsibility to current and future clients.

Work product privilege and common interest privilege may prevent the discoverability of these documents. There is currently no federal or state law requiring the disclosure of these agreements, however, federal and state legislation has been introduced to address these issues.

In North Dakota, the discoverability of third- party litigation funding is limited as the state has not enacted mandatory disclosure laws requiring parties to reveal such arrangements. Nevertheless, certain federal courts have required it in special circumstances to promote transparency and identify potential conflicts of interest or biases.

Although, the funding agreements themselves are typically not discoverable under North Dakota law, discovery may reach communications or evidence showing that the funding has influenced medical providers, witnesses, or the plaintiff’s litigation strategy. In such instances, the funding’s practical effects rather than the contract itself can become discoverable through established legal procedures.

Funding of Attorney’s Fees

In North Dakota, the discoverability of attorney’s fee funding from third-party sources, depends on the nature of the funding arrangement and its relevance to the claims in the case. Although, the plaintiff’s fee arrangements are usually protected, discovery may be permitted if the funding entity exerts control over the litigation.

Under the North Dakota Rules of Civil Procedure, parties may obtain discovery of any non-privileged matter relevant to a claim or defense, and this broad standard governs whether funding related information can be reached. Rule 26 (b) (1) of the North Dakota Rules of Civil Procedure

Communications with Funders   

In North Dakota, the discoverability of communications with plaintiff funders is governed by the state’s general discovery rules, primarily Rule 26 of the North Dakota Rules of Civil Procedure, and is assessed on a case-by- case basis. There is no North Dakota statute that automatically requires these communications. In the absence of a specific state law on litigation funding, courts determine discoverability based on established legal principle: the party seeking discovery must show the communications are relevant, while the funded party may claim privilege to resist disclosure. 

Identity of Funders

In North Dakota, the identity of litigation funders is not automatically discoverable and is determined on a case-by-case basis through the discovery process. This applies to both third-party funders and medical network funding arrangements. Under Rule 26(b) of the North Dakota Rules of Civil Procedure, parties may obtain discovery of any relevant, non-privileged matter. As a result, an opponent could seek to learn a funder’s identity if it is relevant to a claim or defense, but a court may restrict or deny such discovery if the information is privileged or the request is unduly burdensome.

The identity of the funder may become discoverable in the following situations:

• Waiver of privilege: Funders may be discoverable if privileged information is shared without protection.
• Funder control over litigation: Discovery is allowed if the funder controls litigation or settlement.
• Relevance to a claim or defense: the funder’s identity may be relevant to claims or defenses.
• Showing something untoward: Discovery is permitted if there’s evidence of misconduct
• Good cause: Courts may order discovery for conflicts of interest or other valid reasons.

Ohio courts have not directly addressed this issue. Like most states, Ohio allows discovery of any “nonprivileged matter . . . relevant” to a claim. Civ.R. 26(B)(1). This could theoretically include litigation funding. The Civil Rules do allow discovery of insurance agreements under Civ.R. 26(B)(2), which could be deemed analogous to litigation funding, but no court has explicitly so held. Theoretically, a party could demand discovery of litigation funding under a theory that it demonstrates bad faith in litigation, or the funding entity is automatically an interested party and therefore subject to deposition or other discovery.

On the other hand, the U.S. District Court for the Northern District of Ohio, the only Ohio-based court to directly address discovery of third-party litigation funding, suggested that such information was protected under the work product doctrine. In re Nat’l Prescription Opiate Litig., No. 1:17-MD-2804, 2018 WL 2127807 (N.D. Ohio May 7, 2018). In the court’s words, only “extraordinary circumstances” would justify disclosure, but the court did not elaborate on what those extraordinary circumstances might be. Until an Ohio court picks between these two paths—or adopts a third—discoverability will be murky.

In Oklahoma, the discoverability of third-party litigation funding will soon be expressly governed by statute. In May 2025, Governor Stitt signed House Bill 2619 into law, establishing new disclosure requirements. Under HB 2619, a party must produce any litigation funding agreements upon request in discovery and must also submit an affidavit certifying whether the funding originates from a foreign state or entity. The purpose of the legislation is to promote transparency in litigation financing and deter improper influence by third-party funders. Effective November 1, 2025, HB 2619 will amend 12 O.S. § 3226 by adding subsection (B)(1)(c).

Oregon law does not prohibit discovery of third-party litigation funding files, nor does it have any statutes that regulate third-party litigation funding.  There are several considerations that parties and practitioners should consider when third party litigation funding is involved, including whether those materials could be considered discoverable and potential waiver of attorney-client privilege with regard to disclosures to third parties. 

While discovery related to third-party litigation funding is permitted in Pennsylvania in some cases, such as claims arising out of champertous assignment of claims, a third-party litigation funder’s files are typically protected by under the attorney-client privilege.  Further, communications with a litigation funder are protected as work product. Lambeth Magnetic Structures, LLC v Seagate Technology (US) Holding, Inc., 16–CV–0538, 2018 WL 466045, at *5 (W.D. Pa. Jan. 18, 2018), Devon IT, Inc. v. IBM Corp., 2012 U.S. Dist. LEXIS 166749 (E.D. Pa. Sep. 27, 2012).

Any time that a plaintiff takes out a law loan, the funding company must file a UCC lien with the Department of State. While this filing does not provide the amount of the lien, it typically provides the date the lien was filed, which can be useful in comparing the timing of the funding with a plaintiff’s medical treatment in a particular action. One can also view the filing statement, which provides the debtor’s name and address, and the secured party’s name and address. These filings are accessed through the Department of State’s website / database, which requires log-in information.

Although the issue has not been addressed by any Rhode Island court, it is unlikely that Rhode Island’s discovery rules would permit discovery of third-party litigation funding. Rule 26(b)(1) of the Rhode Island Superior Court Rules of Civil Procedure provides:

In General. Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any documents, electronically stored information or tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

Rule 26(b)(2) permits the disclosure of insurance agreements, even though it is not relevant or admissible at trial. With respect to the discoverability of third-party litigation funding, a Rhode Island court would likely decide that such information is not discoverable on the grounds that the information is not reasonably calculated to lead to the discovery of admissible evidence. Third-party litigation funding agreements are not analogous to insurance agreements, which are discoverable (for purposes of facilitating settlement negotiations). It is unlikely however, that discovery related to third-party litigation funding would assist the parties in resolving the case through settlement.

Although regulation of third-party litigation funding is not well defined outside the general requirements imposed on lenders, the Rhode Island legislature has recently attempted to regulate third-party litigation funding. However, thus far, such attempts have been unsuccessful. See HB 5221, 2025 Gen. Assemb., Jan. Sess. (R.I. 2025); HB 7574, 2024 Gen. Assemb., Jan. Sess. (R.I. 2024); SB 2212, 2024 Gen. Assemb., Jan. Sess. (R.I. 2024).

South Carolina generally permits discovery of third-party litigation funding agreements when they are relevant. The discoverability of third-party litigation funding in South Carolina is governed by the state’s broad discoverability rules, which allow parties to obtain information relevant to the subject matter of a pending action unless it is privileged.[i] Specifically, under Rule 26(b)(1) of the South Carolina Rules of Civil Procedure, “parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.”[ii] Courts have increasingly allowed discovery of third-party litigation funding where it may impact issues such as damages, case valuation, or potential bias, although materials protected by attorney-client privilege or the work-product doctrine remain shielded.[iii] Historically, courts had treated litigation funding as protected by the “collateral source” rule, which shielded the existence and details of funding agreements from discovery. However, in 2014, the South Carolina Department of Consumer Affairs deemed litigation funding as a consumer “loan” under the state’s Uniform Consumer Credit Code. This decision meant that such transactions could now trigger loan disclosure requirements and interest-rate regulation.

Regarding claims of attorney-client privilege, disclosure of communications with a funder, who is a third-party, may waive attorney-client privilege unless the funder qualifies under the common interest exception.[iv] To qualify for this exception and maintain attorney-client privilege, the client and the third party must share a “common interest.”[v] However, courts have found that the common interest exception is limited to shared legal, rather than financial, interests.[vi]

The modern trend in South Carolina has been to allow discovery of third-party litigation funding when it is relevant and not otherwise protected. Thus, practicing attorneys should seek discovery of funding arrangements whenever possible.

[i] Rule 26(b)(1), SCRCP.

[ii] Id.

[iii] In re Mt. Hawley Insurance Company, 427 S.C. 159 (2019).

[iv] Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1173-74 (D.S.C. 1974).

[v] Id.

[vi] Id.

South Dakota courts have not addressed the admissibility of third party litigation funding in a published decision. In fact, South Dakota courts have not officially approved third-party litigation funding and traditionally have adhered to the concepts of champerty.

However courts are becoming more open to third-party litigation and the South Dakota senate introduced a bill in 2025 governing third party litigation funding that would have required such funding contracts to be produced to all parties in civil litigation. The proposed legislation sought to place several restrictions and transparency requirements on funders, including limits on their percentage of a legal recovery. The bill did not pass. 

Tennessee has no specific statutory or regulatory restrictions on discovery of third party litigation funding. 

Although recent caselaw developments in Texas have opened the door to discovery of plaintiff litigation funding, obtaining this information in practice remains challenging.

In personal injury cases, the amount of medical expenses is a key driver of the plaintiff’s potential recovery. Frequently, plaintiffs receive medical treatment under a Letter of Protection (LOP)—an arrangement in which a medical provider agrees to postpone payment until the conclusion of litigation or settlement. Plaintiffs’ attorneys are typically protective of these agreements, as they can suggest that the attorney is influencing or directing the client’s medical care.

When defendants request LOPs in discovery, plaintiff’s counsel usually raises numerous objections, asserting that such documents are privileged, confidential, irrelevant, and violate the plaintiff’s privacy rights.

However, the Texas Supreme Court has addressed this issue in two significant decisions. In In re Central Oregon Truck Co., Inc., 644 S.W.3d 668 (Tex. 2022), the Court confirmed that LOPs are discoverable. In In re K & L Auto Crushers, LLC, 627 S.W.3d 239 (Tex. 2021), the Court emphasized that LOPs give medical providers a direct financial interest in the outcome of the litigation, thus making them subject to discovery under Texas Rule of Civil Procedure 192.3(e)(5), which permits discovery of bias in expert witnesses.

Although these rulings provide a clear legal foundation for the discoverability of LOPs, in practice, especially in plaintiff-friendly venues, successfully obtaining them through discovery remains difficult.

No special rules exist governing the discovery of third-party litigation funding in Utah. An attorney is left to make their best arguments based on the rules governing the scope of discovery in general.

Vermont has enacted a comprehensive statutory scheme to regulate third party litigation funding, which is codified in Title 8 of the Vermont Statutes as Chapter 74, “Consumer Litigation Funding Companies.”  In 8 Vt. Stat. Ann. § 2255, the legislature addressed privileges:  “A communication between a consumer’s attorney and the company shall not be discoverable or limit, waive, or abrogate the scope or nature of any statutory or common-law privilege, including the work-product doctrine and the attorney-client privilege.”  While there are no cases directly on point, the Vermont Supreme Court’s close guarding of the collateral source rule makes it unlikely that 3rd party litigation funding-related materials would generally be discoverable in litigation.

The rules governing third party litigation funding to consumers are also laid out in Title 7, Ch. 74 of the Vermont Statutes, and are comprehensive.  Litigation funding companies must register with the Commissioner of Banking and Insurance.  Among other things, the companies are prohibited from referring the consumer to a specific law firm or healthcare provider; nor may they pay commissions or referral fees to a law firm or healthcare provider.  The companies are prohibited from paying court costs or attorney’s fees.  Violation of these laws or other unfair or deceptive acts by Litigation Funding companies are considered violations of the Consumer Protection Act, in addition to any other appliable common law or statutory rules, and may be enforced by the Vermont Attorney General as well as the Commissioner of Banking and Insurance, as well as by the consumer. 

Courts in Virginia would likely find third-party litigation funding discoverable. Courts have found third-party litigation funding to be admissible and because third-party litigation funding is admissible it is also discoverable.

Federal Courts in Virginia have held that third-party litigation funding is only relevant, and thus discoverable, if the requesting party has an actual basis for the relevancy of the information which is more than mere speculation. Ashghari-Kamrani v. United Servs. Auto. Ass’n, 2016 U.S. Dist. LEXIS 197601 (E.D. Va. May 31, 2026); see Centripetal Networks, Inc. v. Keysight Techs., Inc., 2018 U.S. Dist. LEXIS 186480 (E.D. Va., Sept. 25, 2018) (holding the Defendants could not mention the Plaintiff’s efforts to secure litigation funding without leave of Court).

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ALFA International Headquarters
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Chicago, IL 60611
Phone: (312) 642-2532

The discoverability of third-party litigation funding is governed by Wis. Stat. § 804.01

• Without awaiting a discovery request, a party shall provide other parties with any agreement made with a third-party that has a right to receive compensation that is contingent on and sourced from any proceeds made by settlement, judgment, or otherwise. [i]
• A party may obtain documents and tangible things relating to third-party funding through discovery upon a showing of substantial need and undue hardship in obtaining said documents by other means. Said documents must be deemed relevant to the case.

[i] This excludes attorneys permitted to charge a contingent fee

Wyoming has no specific statute or rules regarding third-party litigation funding or its disclosure. Discovery of third-party litigation funding will be case specific and at the discretion of the presiding judge.