Amazon Cracks Down on Litigation Funding in Mass Arbitration Cases

Amazon has updated its Conditions of Use for US consumers to require disclosure of litigation funding agreements in mass arbitration cases. This move follows a recent update on August 15, which reinstated a binding arbitration clause and added provisions related to litigation finance. According to the new agreement, customers pursuing mass arbitration claims against Amazon must disclose relationships with third-party litigation funders as well as copies of litigation funding agreements.

The agreement also requires disclosure of any financial interest assigned or transferred to a third party. This move aligns with Amazon's previous efforts to urge federal courts to require plaintiffs to disclose outside funding behind lawsuits, joining a group that includes Google, Johnson & Johnson, and ExxonMobil.

State legislators and lawmakers in Congress have pushed for disclosure requirements to regulate the legal funding industry. However, some experts question the effectiveness of this provision, citing concerns over enforceability and the practicality of applying it in mass arbitration cases.