Third-party funding (TPLF) is when a nonparty, who does not have a direct stake in the litigation, funds a lawsuit. There are varying motivations that drive TPLF arrangements—including investors offering loans to receive a portion of the settlement or public interest groups sponsoring impact litigation. This note discusses a specific mode of TPLF that is motivated by a personal interest in the lawsuit rather than monetary gain, referred to as “malice maintenance.” At common law, maintenance was prohibited to prevent powerful and wealthy individuals form taking advantage of the court system. The majority of states today, however, permit at least some form of maintenance and yet this growing practice is largely unregulated. This note examines Bollea v. Gawker, a recent and controversial example of secret third-party funding as a modern form of malice maintenance. Malice maintenance amplifies the legal and ethical concerns related to TPLF which include conflict of interest, prolonged litigation, and a lack of transparency. This note argues that given the inherent risks of malice maintenance in third-party litigation funding, the Federal Rules of Civil Procedure should be amended to allow uniform regulation at the federal level. With the court aware of the presence of the third-party funder, it will have the opportunity to address any suspicious legal strategies and hold lawyers accountable. Requiring disclosure of any personal interest in the lawsuit will ensure that the court is privy to any improper personal agenda or serious conflicts of interest and serve as a deterrence for malice maintenance.
Malice Maintenance Is “Runnin’ Wild”: A Demand for Disclosure of Third-Party Litigation Funding,
83 Brook. L. Rev.
Available at: https://brooklynworks.brooklaw.edu/blr/vol83/iss3/5