Judges are required by statute and ethics rules to recuse when they know they have a financial interest posing a conflict of interest or an appearance of one. The possibility that a TPLF contract could necessitate recusal is real because TPLF contracts are ubiquitous—Westfleet Advisors reports that “82% of law firm lawyers say they use legal finance”—and because the funders of those agreements include public companies, private companies, family offices, and individuals both here and abroad. Since neither FRCP 7.1, which requires corporate disclosures, nor any other FRCP provision expressly requires disclosure of TPLF funding, judges do not have the information they need to make recusal decisions.
Witnesses also can have conflicts. FRE 607 allows parties to attack the credibility of a witness who is being paid and/or has a direct interest in the outcome of the case. But parties are deprived of this important protection when they are kept in the dark about TPLF contracts.
The only way for judges and parties to understand and avoid conflicts of interest is disclosure of TPLF contracts.
