ANALYSIS: Litigants Put Lit Funders Under Scrutiny in Discovery

The corporate defendants in two big-name cases recently raised counterclaims that focus attention on litigation funders, which typically operate in the background. Their related discovery demands—if allowed—may reveal how much document discovery and testimony related to third-party financing parties can obtain.

These actions may be signs that defendants are taking a more aggressive stance against the litigation funders backing what they contend are meritless lawsuits. While civil defendants often try to discover the identities of litigation funders and to get copies of the funding agreement, such requests for additional documents and communications usually have to contend with plaintiffs’ objections based ...