N.Y. App. Div., First Department · US (NY) · 2025 · Decided
Citation/Docket: Case No. 2025-00995 (1st Dep't 2025)
Posture: Defense sought funding discovery on fraud showing
Funder(s) involved: (Consumer funders in PI litigation)
In a personal injury action, defendants presented evidence of systemic staged-accident fraud and sought discovery into plaintiffs' litigation funding.
First Department affirmed vacatur of note of issue and ordered funding discovery, fraud allegations opened the door.
The fraud exception to funding-discovery denial is now established in NY; funders in the PI space need underwriting controls against fraud rings, which also drove NY's 2026 Consumer Litigation Funding Act.
The fraud-driven discovery fight in this case was one of the developments that helped drive New York's 2026 Consumer Litigation Funding Act.
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Compiled from public sources (court filings, published opinions, and secondary reporting) as part of the Institute's Phase 1 Dispute Library research. This is educational material, not legal advice; case citations should be independently verified before relied upon.