Name
Naming the Money: Causal Effects of Funding Disclosure on Litigation Activity
Date & Time
Tuesday, July 7, 2026, 11:30 AM - 11:55 AM
Description

     We analyze how mandatory disclosure affects litigation markets by examining a court order in the U.S. District Court of Delaware, which requires parties to disclose third-party litigation financing (TPLF), with subsequent support from the U.S. Court of Appeals for the Federal Circuit. Using difference-in-differences methods and a sample that includes funders that have used TPLF at least once before 2024, we find that mandatory disclosure does not reduce the percentage of new filings with TPLF across the United States. However, this deterrent effect appears in the court issuing the order. Specifically, it lowers both total new filings and new filings with TPLF in the U.S. District Court of Delaware compared to all U.S. federal courts. This suggests that revealing the funder's identity to the judge increases scrutiny during the filing process, thereby raising the reputation costs associated with filings at that court. The paper adds to discussions about the regulation of third-party litigation financing disclosures and the real impact of mandatory disclosure on litigation strategies.

Tien-Wei Hwang
Keywords
mandatory disclosure, real effects, litigation financing, Delaware, Federal Circuit
Theme
FINANCE (OTHER)
Author 1
Winifred Huang
Author 2
Tien-Wei Hwang