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Chamber-backed rules proposal fails, again

The U.S. Chamber of Commerce’s Institute for Legal Reform has once again failed in its bid to amend the Federal Rules of Civil Procedure to require the disclosure of litigation finance agreements in civil litigation.

In November 2017, the Advisory Committee on Rules of Practice and Procedure—which had rejected an identical pressure campaign by the Chamber in 2014 and in 2016—asked a subcommittee on MDLs to consider the Chamber’s litigation finance disclosure proposal. Now, having studied the issue for almost two years, the Advisory Committee today decided not to act on the proposal and instead have returned the matter to the larger committee for “additional study” over the next several years.

Effectively, this represents a third failure for the Chamber.

This failure is by no means surprising: The Chamber has tried multiple times to push through a change in the federal rules— and failed, because the United States has clear and robust litigation disclosure rules that have worked well for many decades. No change has happened because no change is merited.

This latest failure also comes at a time when lawyers increasingly support legal finance and oppose the Chamber’s position. According to the 2019 Legal Finance Report, 73.1% of US in-house and law firm lawyers agree: “Most lawyers support litigation finance; its opponents are a vocal minority who exploit unjustified fears about its use.” A clear majority (83.3%) also agree: “Discovery and professional conduct rules adequately address issues raised by the presence of legal finance.”

One could conclude that the more the Chamber tries and fails to push for unmerited changes that create unnecessary burdens for its members, the less popular its position becomes. That may not prevent the Chamber from continuing to push that position regardless—but it should cause lawyers, businesses, policy makers and the media to consider the effort with even greater skepticism.