New Jersey District Clarifies New Local Civil Rule Regarding Third Party Funding Disclosures | Faegre Drinker Biddle & Reath LLP

For the past four months, we have followed the New Jersey District proposal and the passage of a new local civil rule – L. Civ. R. 7.1.1 – require lawyers to disclose details of third party litigation funding. The New Jersey District Clerk has now issued a notice to the bar that this new rule only requires the filing of a return where there is third-party litigation funding.

As we have already explored, the new Rule adopted on June 21, 2021 requires parties to file statements containing information about any non-party that “provides funding for all or part of the attorney’s fees and expenses for the litigation. on a non-basis of recourse “in exchange either for” a possible financial interest based on “the results of the dispute, or for a” non-monetary result which does not have the nature of a personal or bank loan, or insurance “. In new cases, these declarations must be filed within 30 days of the filing of an initial pleading or revocation. For all cases pending in the District of New Jersey prior to the enactment of Rule 7.1.1, such disclosure statements must be filed “within 45 days of the effective date of[e] Rule ”- that is, by Thursday August 5, 2021.

The notice to the bar of July 29, 2021 specifies that local civil rule 7.1.1 “requires the filing of a declaration only when there is funding for litigation by a third party” and “does not require the filing of a negative statement to the effect that no third party – funding litigation between the parties exists in the case.

The new rule places a requirement on parties who receive third-party litigation funding. Parties that do not receive such funding do not need to file declarations under Rule 7.1.1.

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