H.R.1109 - Litigation Transparency Act of 2025 (119th Congress)
Summary
H.R. 1109, the Litigation Transparency Act of 2025, aims to amend Title 28 of the United States Code to enhance transparency regarding third-party beneficiaries in civil actions. The bill requires parties in civil lawsuits to disclose the identities of individuals or entities entitled to receive payments contingent on the outcome of the litigation. It also mandates the production of agreements that establish such contingent rights, subject to certain exceptions and court stipulations.
The Act seeks to ensure that courts and other parties are aware of all financial interests tied to a civil action. This includes those of entities that may not be directly involved in the lawsuit but stand to gain financially from its resolution.
The bill outlines specific timing requirements for these disclosures and imposes a duty to correct or supplement disclosures if new information arises or if previous disclosures become inaccurate.
Expected Effects
The primary effect of this bill would be increased transparency in civil litigation by revealing the identities and agreements of third-party beneficiaries. This could lead to greater scrutiny of litigation financing arrangements and potentially influence settlement negotiations and judicial decisions.
It may also deter frivolous lawsuits or those driven primarily by the interests of undisclosed third-party funders. The bill could also increase the administrative burden on parties involved in civil actions, as they would need to identify and disclose relevant information about third-party beneficiaries.
Furthermore, the bill's applicability to pending and future civil actions ensures its immediate and broad impact on the legal landscape.
Potential Benefits
- Increased transparency in civil litigation, allowing courts and parties to better understand the financial interests at stake.
- Potential deterrence of frivolous lawsuits driven by undisclosed third-party financial interests.
- Greater accountability for entities that stand to profit from litigation outcomes.
- Enhanced fairness in settlement negotiations by providing all parties with complete information.
- Improved public trust in the integrity of the legal system.
Most Benefited Areas:
Potential Disadvantages
- Increased administrative burden on parties involved in civil actions, requiring them to identify and disclose information about third-party beneficiaries.
- Potential for strategic use of disclosure requirements to harass or intimidate opposing parties.
- Possible chilling effect on legitimate litigation financing arrangements, which could limit access to justice for some plaintiffs.
- Risk of disputes over the scope and applicability of the disclosure requirements, leading to additional litigation.
- Potential for increased costs associated with compliance, which could disproportionately affect smaller parties.
Constitutional Alignment
The Litigation Transparency Act appears to align with the Constitution by promoting transparency and fairness within the judicial system. While the Constitution does not explicitly address third-party litigation funding, the Act's focus on disclosure can be seen as supporting the principles of due process and equal protection under the law, as outlined in the Fifth and Fourteenth Amendments.
By ensuring that all parties have access to relevant information, the Act can help to prevent abuses of the legal system and promote just outcomes. The Act does not appear to infringe upon any specific constitutional rights or provisions.
However, potential challenges could arise if the disclosure requirements are interpreted in a way that unduly burdens a party's right to access the courts or infringes upon attorney-client privilege.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).