Litigation Funding Rights: NJ Supreme Court Decision

New Jersey Supreme Court Civil Practice Committee Protects Plaintiff’s Access to Litigation Funding 

For a small patent law firm, securing litigation funding proved essential to taking on a high-stakes intellectual property case against a tech giant. The firm’s client, an innovative startup, had its patented software allegedly infringed by the larger company.

Despite having a strong claim, the startup could not afford the massive legal fees required to take this case to trial against the tech giant’s army of lawyers. Commercial litigation funding provided the capital needed to level the playing field.

The funding covered upfront costs like attorney’s fees, expert witnesses, document research, and electronic discovery expenses. Without it, the patent firm would have been forced to settle for a low-ball offer or walk away, allowing the deep-pocketed corporation to profit from appropriating the startup’s intellectual property.

Instead, litigation funding empowered the firm to thoroughly develop and pursue the meritorious case through years of motions, discovery battles, and pre-trial hearings. It gave them crucial staying power against delay tactics employed by the corporate defendant.

Ultimately, the funding ensured the startup’s innovative work did not go unvindicated. After a lengthy trial, the jury awarded a multi-million dollar verdict — validating the patents and compensating for the misappropriated technology.

Commercial litigation funding allows firms like this patent boutique to take on corporate Goliaths. It levels the playing field and removes economic barriers to asserting legitimate legal rights against well-resourced opponents. Without it, injustices would persist as worthy claims never make it to the courtroom.

NJ Corporate Entity Seeks to Limit Funding

The New Jersey Civil Justice Institute claims litigation funding unfairly sways plaintiffs’ settlement decisions by providing financial support. They argue funders become “silent puppet masters” who exert control without accountability. Their proposed mandates for disclosure aim to cast suspicion on the important role of litigation funding in legal proceedings.

However, the Institute advocates for business interests, not plaintiffs’ rights. Its website rhetoric about “unscrupulous litigants” and “junk lawsuits” aligns with corporate defendants seeking to avoid liability. The Institute has filed briefs attempting to raise the bar for plaintiffs to prove liability in injury cases. This agenda serves their business clients by making it harder for individuals to bring claims. Their arguments against litigation funding appear designed to restrict plaintiffs’ access to justice.

By casting aspersions on litigation funding, the Institute seeks to tip the scales further in favor of deep-pocket defendants. Portraying funders as sinister “puppet masters” promotes unwarranted suspicion of personal injury claims. The Institute’s disclosure mandate could deter some plaintiffs from seeking funding and weaken their ability to pursue fair compensation.

How Mandatory Disclosure of Litigation Funding Harms Plaintiffs

Mandatory disclosure rules fail to prevent improper influence over settlements. Instead, they grant excessive access to plaintiffs’ personal finances, diverting focus from negligent conduct and placing unfair scrutiny on how victims use funds during lengthy legal battles. The disclosure allows fishing expeditions into plaintiffs’ private affairs, applying intrusive oversight that re-victimizes plaintiffs by forcing them to justify reasonable and necessary expenditures.

Justice comes from focusing on each case’s facts—the wrongdoing, resulting harms, and appropriate compensation. Disclosure rules instead shift the spotlight to plaintiffs’ financial circumstances and away from defendants’ actions, skewing scrutiny in the wrong direction. Plaintiffs should not be subjected to undue interrogation of their personal spending simply to seek redress for harm done to them. True justice examines only the merits of each claim, not the plaintiffs’ private financial matters.

The Impact of the New Jersey Supreme Court Civil Practice Committee’s Decision

The New Jersey Supreme Court Civil Practice Committee affirms plaintiffs’ right to access funding by rejecting proposed mandatory disclosure rules. This removes obstacles that would have:

  • Deterred plaintiffs from seeking funding
  • Invaded privacy around personal finances
  • Shifted focus away from defendants’ negligent conduct

Most importantly, it upholds the legal system’s duty to deliver impartial justice based on case facts, not resource imbalances between parties.

Looking Ahead: Protecting Fair Access to Justice

This decision keeps New Jersey’s litigation funding landscape open and accessible for plaintiffs. As efforts persist nationwide to impose disclosure rules, New Jersey protects fair access to justice.

Over the past few years, business groups have lobbied across multiple states for bills mandating litigation funding disclosure, with some success in states like Wisconsin. However, proposals often stall due to lawmakers recognizing the harm disclosure could inflict on plaintiffs.

Litigation funding remains essential so victims can fight for compensation without compromising basic needs. At USClaims, we will continue to bridge this gap for plaintiffs because when recovery hangs in the balance, justice should not.

To learn more about litigation funding and ongoing legislative efforts around mandatory disclosure, visit www.usclaims.com.

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