S. 840 – Litigation Funding Transparency Act of 2021

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Updated February 8, 2026 at 12:36 AM UTC

The Litigation Funding Transparency Act of 2021 amends Title 28 to require that in class actions and coordinated or consolidated pretrial proceedings, parties disclose any third‑party funder that has a contingent right to payment and make the funding agreement available for inspection. Disclosures must be made within 10 days after the funding agreement is signed or when the action is served/subject to the rule, whichever is later. The law applies to cases filed after the act’s enactment.

Key Provisions

Class counsel must disclose in writing the identity of any commercial entity with a contingent payment right in a class action and provide the funding agreement for inspection, unless the court orders otherwise.
The disclosure in class actions must occur no later than 10 days after the funding agreement is executed or at the time the action is served, whichever is later.
In multidistrict litigation pretrial proceedings, counsel for parties must similarly disclose any third‑party funder and produce the funding agreement, following the same timing rule.
The bill adds a new Section 1716 to the U.S. Code and updates MDL provisions by renumbering subsections and inserting the new disclosure requirements.
The amendments apply only to cases pending or commenced after the act becomes effective.

Legislative Activity

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1 earlier action

SenateIntro Referral Latest Action

Read twice and referred to the Committee on the Judiciary.

Judiciary Committee

March 18, 2021

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SenateIntro Referral

Introduced in Senate

March 18, 2021

SenateIntro Referral

Read twice and referred to the Committee on the Judiciary.

Judiciary Committee

March 18, 2021

Bill Text

Latest available legislative text

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Introduced in SenateIssued March 18, 2021

II

117th CONGRESS

1st Session

S. 840

IN THE SENATE OF THE UNITED STATES

March 18, 2021

Mr. Grassley (for himself, Mr. Cornyn, Mr. Tillis, and Mr. Sasse) introduced the following bill; which was read twice and referred to the Committee on the Judiciary

A BILL

To amend title 28, United States Code, to increase transparency and oversight of third-party litigation funding in certain actions, and for other purposes.

1.

Short title

This Act may be cited as the Litigation Funding Transparency Act of 2021.

2.

Transparency and oversight of third-party litigation funding in class actions

(a)

In general

Chapter 114 of title 28, United States Code, is amended by adding at the end the following:

1716.

Third-party litigation funding disclosure

(a)

In general

In any class action, class counsel shall—

(1)

disclose in writing to the court and all other named parties to the class action the identity of any commercial enterprise, other than a class member or class counsel of record, that has a right to receive payment that is contingent on the receipt of monetary relief in the class action by settlement, judgment, or otherwise; and

(2)

produce for inspection and copying, except as otherwise stipulated or ordered by the court, any agreement creating the contingent right.

(b)

Timing

The disclosure required by subsection (a) shall be made not later than the later of—

(1)

10 days after execution of any agreement described in subsection (a)(2); or

(2)

the time of service of the action.

.

(b)

Technical and conforming amendment

The table of sections for chapter 114 of title 28, United States Code, is amended by adding at the end the following:

1716. Third-party litigation funding disclosure.

.

3.

Transparency and oversight of third-party litigation funding in multidistrict litigation

Section 1407 of title 28, United States Code, is amended—

(1)

by redesignating subsections (g) and (h) as subsections (h) and (i), respectively; and

(2)

by inserting after subsection (f) the following:

(g)

(1)

In any coordinated or consolidated pretrial proceedings conducted pursuant to this section, counsel for a party asserting a claim whose civil action is assigned to or directly filed in the proceedings shall—

(A)

disclose in writing to the court and all other parties the identity of any commercial enterprise, other than the named parties or counsel, that has a right to receive payment that is contingent on the receipt of monetary relief in the civil action by settlement, judgment, or otherwise; and

(B)

produce for inspection and copying, except as otherwise stipulated or ordered by the court, any agreement creating the contingent right.

(2)

The disclosure required by paragraph (1) shall be made not later than the later of—

(A)

10 days after execution of any agreement described in paragraph (1)(B); or

(B)

the time the civil action becomes subject to this section.

.

4.

Applicability

The amendments made by this Act shall apply to any case pending on or commenced after the date of the enactment of this Act.