Must a claimant disclose its litigation funder or funding terms?

It depends on the forum. GAO found no nationwide requirement in federal litigation, but the District of New Jersey's Local Civil Rule 7.1.1 (June 2021) requires a statement identifying the funder, whether its approval is needed for litigation or settlement decisions, and the nature of its financial interest. Wisconsin (2018) and West Virginia (2019) require disclosure of funding agreements by statute, per GAO. ICSID's 2022 Arbitration Rule 14 requires a party to name any third-party funder and those who own and control it.

Are funding agreements usually discoverable?

Often not in full. Federal Rule of Civil Procedure 26(a)(1)(A)(iv) requires initial disclosure of insurance agreements, but not funding agreements. Courts decide requests for funding documents case by case. Burford's 10-K says 'some federal courts require disclosure of legal finance,' and GAO notes defendants may file discovery motions to get access to agreements.

Are materials shared with a funder privileged?

Often protected, but the protection can be lost. Rule 26(b)(3)(A) protects 'documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative,' unless the other side shows substantial need. Burford's 10-K warns that privileged information 'can lose its protection and become accessible to a litigation opponent if it is disclosed (a concept called waiver in the United States),' so funders operate under 'a strict obligation to protect it.'

Why do funders disclose so little about cases?

Partly because of privilege. Burford's 10-K says its obligation to protect privileged information means 'we do not release asset valuations of ongoing matters underlying our assets,' and that 'investors will not have an opportunity to evaluate our legal finance assets and will be dependent upon our judgment.' GAO found six of twelve funders it asked provided agreement examples with returns, fees and amounts redacted.

Who sees the disclosure in arbitration?

Under ICSID Rule 14, the Secretary-General passes the funder notice to the parties and to arbitrators 'for purposes of completing the arbitrator declaration,' so arbitrators can check for conflicts, and the tribunal may order disclosure of further information about the agreement. The rule targets identity and conflicts, not the economics, unless the tribunal orders more.

What does disclosure mean for an investor?

Two things. Case-level opacity is structural: an investor in a fund or a listed funder will not see the merits analysis or the valuation of individual cases. And where disclosure rules apply, terms such as funder approval rights become visible to the court and the opponent, which can affect settlement dynamics. Ask how a manager handles disclosure requests and what it reports to investors in place of case details.

Litigation Funding Disclosure and Privilege

Litigation Finance & Legal Claims

Definition

Litigation funding disclosure is a requirement to reveal that a case is funded, who the funder is, or the terms of the agreement, to the court, the tribunal or the other side. Privilege and work product protection keep some materials, such as counsel's analysis shared with a funder, from being disclosed. Burford's guide says 'the majority of courts do not require disclosure of commercial legal finance arrangements,' and that materials created for funders are protected as work product in the US and privileged in many other jurisdictions.

Why it matters

Disclosure rules decide what the court and the opponent learn about a case's funding; privilege rules decide what they learn about its merits. Both shape funding: agreements are drafted to keep control with the client and to survive disclosure, and funders guard privileged material because a waiver can hurt the claimant's case. The result is that investors see little about individual cases, which Burford states plainly in its risk factors. For an investor, that opacity is permanent, so the questions shift to process: how the manager values and monitors cases, what aggregate data it reports, and how disclosure requirements in its main forums have affected its cases.

Common misconceptions

•Funding is not secret everywhere, because some courts, US states and ICSID require funders to be named.
•Disclosure of identity is not disclosure of terms, because most rules require the funder's name and interest, not the full agreement.
•Sharing case materials with a funder is not automatically privileged, because protection depends on the material and can be waived.
•Investor opacity is not a choice by one funder, because privilege obligations limit what any funder can report about pending cases.
•Insurance and funding are not treated the same, because federal initial disclosures cover insurance agreements but not funding agreements.

Technical details

Worked example (illustrative): one funded case in two forums

Forum A (a US court without a funding rule): the funding is not disclosed unless the court orders discovery of it.

Forum B (D.N.J.): the claimant files a statement naming the funder, saying whether funder approval is needed for settlement, and describing the funder's financial interest.

If the agreement gives the funder consent rights on settlement, forum B's opponent knows it.

In ICSID: the funder and its owners are named under Rule 14 and passed to the arbitrators; the tribunal can order more.

Same agreement, different visibility, and potentially different settlement dynamics.

What can be disclosed

The fact of funding.

The funder's identity and owners.

Whether the funder must approve litigation or settlement decisions.

The nature of the funder's financial interest.

The agreement itself, if a court orders it.

What AltStreet's reviews and filings show

GAO-23-105210: no nationwide federal requirement; D.N.J. Local Civil Rule 7.1.1 (June 2021); Wisconsin (2017 Act 235, 2018) and West Virginia (2019) disclosure statutes; six of twelve funders provided redacted agreement examples.

Burford 2025 10-K: privileged information can be waived if disclosed; it does not release valuations of ongoing matters; investors cannot independently evaluate its assets.

ICSID Arbitration Rule 14 (in force July 1, 2022): written notice of third-party funding, passed to parties and arbitrators; further disclosure on order.

FRCP 26(b)(3)(A): protection for materials prepared in anticipation of litigation, subject to substantial need.

Questions about disclosure and privilege

Which of the fund's cases sit in forums requiring funder disclosure?

Have opponents sought funding documents, and with what result?

How does the manager protect privileged material it receives?

What does the manager report to investors in place of case-level detail?

Do any agreements contain terms that would affect settlement if disclosed?

How investors apply the term

Investors usually apply this term by tying the definition back to the controlling documents and then asking which cash flows, rights, restrictions, or valuation assumptions it changes. A useful review looks at the term alongside fees, leverage, liquidity, reporting frequency, and manager discretion rather than treating it as a standalone concept.

The practical diligence test is simple: identify who benefits if the assumption is wrong, who has control when conditions change, and what evidence the investor receives after closing. Terms that cannot be reconciled to documents, cash movements, and monitoring data should be treated as marketing shorthand until proven otherwise.

Frequently asked questions

Must a claimant disclose its litigation funder or funding terms?: It depends on the forum. GAO found no nationwide requirement in federal litigation, but the District of New Jersey's Local Civil Rule 7.1.1 (June 2021) requires a statement identifying the funder, whether its approval is needed for litigation or settlement decisions, and the nature of its financial interest. Wisconsin (2018) and West Virginia (2019) require disclosure of funding agreements by statute, per GAO. ICSID's 2022 Arbitration Rule 14 requires a party to name any third-party funder and those who own and control it.
Are funding agreements usually discoverable?: Often not in full. Federal Rule of Civil Procedure 26(a)(1)(A)(iv) requires initial disclosure of insurance agreements, but not funding agreements. Courts decide requests for funding documents case by case. Burford's 10-K says 'some federal courts require disclosure of legal finance,' and GAO notes defendants may file discovery motions to get access to agreements.
Are materials shared with a funder privileged?: Often protected, but the protection can be lost. Rule 26(b)(3)(A) protects 'documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative,' unless the other side shows substantial need. Burford's 10-K warns that privileged information 'can lose its protection and become accessible to a litigation opponent if it is disclosed (a concept called waiver in the United States),' so funders operate under 'a strict obligation to protect it.'
Why do funders disclose so little about cases?: Partly because of privilege. Burford's 10-K says its obligation to protect privileged information means 'we do not release asset valuations of ongoing matters underlying our assets,' and that 'investors will not have an opportunity to evaluate our legal finance assets and will be dependent upon our judgment.' GAO found six of twelve funders it asked provided agreement examples with returns, fees and amounts redacted.
Who sees the disclosure in arbitration?: Under ICSID Rule 14, the Secretary-General passes the funder notice to the parties and to arbitrators 'for purposes of completing the arbitrator declaration,' so arbitrators can check for conflicts, and the tribunal may order disclosure of further information about the agreement. The rule targets identity and conflicts, not the economics, unless the tribunal orders more.
What does disclosure mean for an investor?: Two things. Case-level opacity is structural: an investor in a fund or a listed funder will not see the merits analysis or the valuation of individual cases. And where disclosure rules apply, terms such as funder approval rights become visible to the court and the opponent, which can affect settlement dynamics. Ask how a manager handles disclosure requests and what it reports to investors in place of case details.