Senate Judiciary Committee Chairman Chuck Grassley, along with Senators Thom Tillis, John Kennedy, and John Cornyn, has introduced the Litigation Funding Transparency Act. The proposed legislation would require parties in mass tort and class action lawsuits to disclose third-party litigation funding arrangements, including those involving foreign entities. The bill also aims to prevent funders from influencing litigation strategy or settlement negotiations and restricts their access to protected discovery materials.
Grassley stated, “Transparency brings accountability. For too long, obscure third-party litigation funding agreements have secretly funneled money into our civil justice system without any meaningful oversight. Americans should know if there are undue pressures at play that could needlessly prolong litigation, harm claimants’ interests or benefit foreign adversaries. The Litigation Funding Transparency Act strikes the right balance of sunshine, while protecting Americans’ access to justice.”
Tillis added, “Predatory litigation financing allows outside funders, including those backed by foreign governments, to profit off our legal system, driving up costs for families and delaying justice. This legislation will bring overdue transparency and accountability to these abusive practices.”
Kennedy commented, “The American people deserve to know when corporations and foreign states pour money into class action lawsuits to influence outcomes. I’m proud to work together with my friend Chairman Grassley to introduce the Litigation Funding Transparency Act, which would lift the lid on the entities funding important legal battles in our country.”
Cornyn said, “By requiring the disclosure of third-party litigation funding, this commonsense bill would restore transparency and accountability to a system that has been plagued by dark money and foreign influence for far too long, and I’m proud to support it.”
Under the proposed act, disclosure is required if a lawsuit is a mass tort or class action and if the funder is a commercial enterprise or foreign entity not party to the suit that provides funding or stands to gain more than what was given. Nonprofit legal organizations offering services on a nonprofit basis are exempt from these requirements. Commercial enterprises expecting only loan repayment or reimbursement of fees paid to counsel are also exempt.
The bill has received endorsements from several organizations including the U.S. Chamber of Commerce, American Property Casualty Insurance Association (APCIA), National Insurance Crime Bureau (NICB), and High Tech Inventors Alliance.
Stephen Waguespack of the U.S. Chamber of Commerce Institute for Legal Reform said: “Outside financiers treat our court system like a casino. They drive up costs for consumers and put our national and economic security at risk. Americans should not be taken advantage of in our own courtrooms... Requiring the disclosure of these hidden financial interests will protect American businesses and safeguard the integrity of our justice system. The U.S. Chamber of Commerce thanks Senators Grassley, Tillis, Kennedy and Cornyn for their leadership on this critical issue and we encourage the Senate to advance this legislation.”
Sam Whitfield from APCIA stated: “APCIA strongly supports Senator Grassley’s Litigation Funding Transparency Act. Bringing transparency to third party litigation funding is a commonsense step that protects consumers and strengthens the integrity of our civil justice system. We applaud Senator Grassley’s leadership in advancing reforms that promote fairness and accountability.”
David J. Glawe of NICB remarked: “From on-the-ground investigations of criminal fraud rings to sophisticated analytics of litigation marketing campaigns, NICB has seen firsthand how third-party litigation funding can serve as a facilitator of insurance fraud... NICB applauds Chairman Grassley’s introduction of the Litigation Funding Transparency Act, which will help combat the improper incentives that attract fraudsters through improved transparency and accountability.”
Dave Jones from High Tech Inventors Alliance added: "We thank Chairman Grassley for taking up this critically important issue and commend him for introducing legislation that would improve transparency regarding who is funding litigation in U.S. courts... Congress should act to require much needed transparency to prevent hedge funds and foreign interests from secretly manipulating our legal system to the detriment of U.S. companies and the broader U.S. economy.”
The Senate Judiciary Committee oversees legislative matters related to judicial issues across the nation as part of its standing committee responsibilities within the U.S. Senate official website. The committee influences constitutional protections as well as public safety through its legislative oversight duties official website. It includes senators from both major political parties under leadership by its chair official website.
