On September 30, 2026, the Delaware Superior Court amended its Civil Rule 26(b) to add a new subsection (b)(3) on litigation-funding agreements, according to a Reed Smith summary published October 5, 2026. In short, an opponent may learn that a funding arrangement exists and who is behind it, but not what the agreement says. This article explains what the rule covers, what it protects, and what it means for someone seeking funding for a case that could be filed in Delaware.
As Reed Smith describes it, the rule defines a litigation-funding agreement as one in which a non-attorney counterparty pays a party's litigation expenses and holds two things: a right to repayment that depends on the outcome of the case, and a right to control some aspect of the litigation, such as approving a settlement. On that description, the definition turns on control. An arrangement that gives a funder repayment rights but no control rights would not fit it, although the actual rule text should be checked before anyone relies on that reading.
The rule permits discovery of only four things: that the agreement exists, who the parties to it are, how it meets the definition, and any specified control rights. Reed Smith reports that the agreement's contents, the case information the funded party shared with the funder, and the work product of the funder's attorney or representative are protected.
There is a narrow exception. The court may order production of the portion of the agreement that grants control rights, such as settlement approval, if the requesting party shows cause. The agreement is also not admissible at trial. Reed Smith notes that the rule applies only in the Superior Court and that the Court of Chancery has not adopted a similar rule, so a funded party in Delaware needs to know which court it is in.
The rule arrives while the federal system is weighing the same question. On October 7, 2026, the International Legal Finance Association, the funders' trade group, filed Rules Suggestion 26-CV-42 with the federal Advisory Committee on Civil Rules ahead of its October 21 meeting. ILFA cites Delaware's Rule 26(b)(3) and a Western District of Louisiana standing order as models that bar production of funding agreements without a court order while allowing limited disclosure of control rights. ILFA says the proposal from Lawyers for Civil Justice and the U.S. Chamber Institute for Legal Reform would instead require automatic disclosure to opponents. These are an interested party's characterizations, not holdings of any court.
ILFA also argues that courts already refuse most requests for funding agreements. Its own dataset of more than 475 actions, it says, found that only 19 of 163 disclosure orders (12 percent) required production of an agreement, each on a case-specific ground. Those figures come from the trade association and have not been independently checked here. Disclosure advocates make a different argument, that opponents and courts need to see who controls a case. Delaware's rule sits between the two positions: it reveals the fact of funding and the control terms, and keeps the financial terms and the strategy private by default.
For someone seeking funding, the practical points are these. If the case is in Delaware Superior Court, expect the other side to be able to ask whether a funder exists and whether it has settlement approval or other control rights. Know exactly what control rights your agreement gives, because those are the terms a court can order produced. Keep in mind that the rule is days old and we found no decision applying it. Ask your own lawyer how it interacts with privilege and work-product protection for the materials you share with a funder, and whether the case is more likely to be filed in the Superior Court or in Chancery.