Delaware Narrows the Lens on Litigation Funding Discovery

Delaware Superior Court Civil Rule 26(b), which took effect September 30, 2026, now defines a “litigation-funding agreement” as an agreement, other than with the party’s own attorney, under which a counterparty pays litigation expenses in exchange for “a contractual right to repayment contingent on the outcome of the case” and “a contractual right to control aspects of the litigation for the party, such as the right to approve any settlement” (i.e., “control rights”). Super. Ct. Civ. R. 26(b)(3)(A). Where that definition is met, an opposing party may seek discovery into the agreement’s existence, the identities of the parties to it, how it satisfies the rule’s definition, and which aspects of the litigation the funder may control. Id. 26(b)(3)(B). But absent a showing of cause, a party may not obtain the funding agreement itself, case-related information a party gave the funder, or the funder’s attorney work product. Id. 26(b)(3)(B). Even where the court orders production for cause, it is limited to the portion of the agreement addressing control rights. Id. 26(b)(3)(D).

Delaware’s amended rule tracks the categories of discoverable information under the District of Delaware’s standing order and several federal district local rules, suggesting state and federal courts are converging on the aspects of litigation funding arrangements that may be discoverable: existence, identity, and control rights are fair game, while economic terms and funder work product are not. The District of New Jersey’s Local Rule 7.1.1, adopted in 2021, requires parties to disclose the identity of any non-party funding attorneys’ fees and expenses on a non-recourse basis and whether the funder’s approval is required for litigation or settlement decisions and, if so, the terms and conditions related to that approval. Further discovery of the agreement’s terms may be permitted upon a showing of good cause. D.N.J. Civ. L.R. 7.1.1.; see also, e.g., Standing Order, D. Del. (Apr. 18, 2022); Standing Order 1.75, W.D. La. (Sept. 9, 2026).

As previously reported in Re:Torts, the federal Judicial Conference’s Advisory Committee on Civil Rules is evaluating a nationwide third-party litigation funding disclosure. In an October 2026 report to the Advisory Committee, the Third-Party Litigation Funding Subcommittee indicated it is considering a disclosure requirement in Rule 26(a)(1). Alternatives include addressing litigation funding in the judicial-management provisions of Rule 16 or 16.1, or adopting a Rule 7.1-style disclosure modeled on New Jersey’s local rule. The Subcommittee cautioned that mandatory disclosure of the details of a funding arrangement—as opposed to the fact of funding—“could raise very serious . . . work product problems.” Delaware’s approach offers a working model that neither forces full transparency nor leaves funding arrangements entirely in the shadows.