§2. Transparency and oversight of third-party beneficiaries in civil cases
This section establishes disclosure requirements in federal civil actions for third-party beneficiaries (other than counsel of record) with a legal right to any payment or thing of value contingent on the action's outcome or proceeds (including settlements, judgments, attorney’s fees awards, or other proceeds). Parties or counsel must (1) disclose such beneficiaries' identities in writing to the court and all other named parties; (2) produce related agreements to the court for in camera review; and (3) produce those agreements to other parties for inspection and copying, subject to court-ordered protections (e.g., privileges, redactions of member/donor/associate identities unless they hold direct beneficiary rights).
Exceptions exempt disclosures for rights solely involving loan principal repayment; principal plus interest not exceeding the higher of 10% or three times the annual average 30-year constant maturity Treasury yield for the preceding year; reimbursement of counsel’s fees; or grant reimbursement. (Thus, the provision promotes transparency on litigation funding arrangements while protecting certain funders and donor privacy.) Disclosures are due by the later of 10 days after agreement execution, Federal Rule of Civil Procedure 26(a)(1) initial disclosures, or court order, with a duty to timely supplement or correct; such disclosures do not affect admissibility or general discoverability.