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Kennedy, Manchin introduce bipartisan Protecting Our Courts from Foreign Manipulation Act to end overseas meddling in U.S. litigation

September 18, 2023

Kennedy, Manchin introduce bipartisan Protecting Our Courts from Foreign Manipulation Act to end overseas meddling in U.S. litigation

Sen. John Kennedy (R-La.), a member of the Senate Judiciary committee, and Sen. Joe Manchin (D-W.Va.) today introduced the Protecting Our Courts from Foreign Manipulation Act of 2023 to stop foreign entities and governments from funding litigation in America’s courts.  “Leaving our courts unprotected from foreign influence—such as from China—poses a major risk to U.S. national security. The Protecting Our Courts from Foreign Manipulation Act would put necessary safeguards in place to ensure that foreign nations, private equity funds and sovereign wealth funds linked to hostile governments are not tipping the scale in federal courtrooms,” said Kennedy. “Foreign actors such as China and Russia use third-party litigation funding to support targeted lawsuits in the United States, undermining our economic and national security. This legislation would provide a commonsense strategy to protect our legal system by requiring greater transparency and accountability from third-party groups and preventing third-party litigation funding from foreign states and sovereign wealth funds. I urge Senators on both sides of the aisle to support this bipartisan bill to ensure that our federal courts are protected from foreign influence,” said Manchin.  Rep. Mike Johnson (R-La.) introduced companion legislation in the House of Representatives. “Foreign states and sovereign wealth funds should not meddle in our justice system. This bill prevents foreign actors like China from financing malicious lawsuits, protects critical industries and prioritizes the interests of Americans in court,” said Johnson.  Currently, foreign entities flood courts with billions of dollars in litigation financing in order to achieve a particular outcome in a case. Hostile foreign governments or companies that are connected with those governments could fund lawsuits in federal courts in order to achieve their geopolitical objectives and undermine America’s national security, especially by targeting proprietary commercial and military technology and exploiting U.S. disclosure requirements. The Protecting Our Courts from Foreign Manipulation Act would:
  • Require disclosure from any foreign person or entity participating in civil litigation as a third-party litigation funder in U.S. federal courts.
  • Ban sovereign wealth funds and foreign governments from participating in litigation finance as a third-party litigation funder, either directly or indirectly. 
  • Require the Department of Justice’s National Security Division to submit a report on foreign third-party litigation funding throughout the federal judiciary.
In January, Kennedy urged U.S. Supreme Court Chief Justice John Roberts and U.S. Attorney General Merrick Garland to take action in order to mitigate the threat foreign actors like China pose by covertly funding litigation in U.S. courts. “The U.S. Chamber of Commerce applauds Sens. John Kennedy (R-LA) and Joe Manchin (D-WV), and Rep. Mike Johnson (R-LA) for introducing this landmark bill, and we urge Congress to quickly pass it to protect consumers, businesses, and U.S. national and economic security,” said Harold Kim, President of the U.S. Chamber of Commerce Institute for Legal Reform. “The R Street Institute is excited to support and endorse Senator Kennedy’s legislation that will shine a light on the shadowy funders of third-party litigation, and limit the ability of foreign governments to negatively impact various U.S. industries by tying them up in anonymous third-party litigation. The current third-party litigation funding laws lack much needed transparency, and they could open the door to foreign entities detrimentally impacting our national security. We applaud the Senator for his leadership on this issue, and we urge more lawmakers to join him in this effort,” said Anthony Lamorena, Senior Federal Affairs Manager at the R Street Institute. Full text of the legislation is available here.

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Commercial Regulatory Issues

Rep. Issa’s Litigation Funding Transparency Effort Falters in House Judiciary Committee

By John Freund |

The latest attempt to legislate transparency in U.S. litigation funding stalled in the House Judiciary Committee this week when the committee considered the Protecting Third Party Litigation Funding From Abuse Act but recessed without ever voting on the measure and did not reconvene to advance it. The bill, introduced by Representative Darrell Issa of California, has now effectively been pulled from further consideration at this stage.

An article in IPWatchdog states that the Protecting Third Party Litigation Funding From Abuse Act was debated alongside other measures during a lengthy markup that focused primarily on immigration enforcement issues. The measure closely tracked a previous effort, the Litigation Transparency Act of 2025, also spearheaded by Issa, which sought to require parties in civil actions to disclose third party funding sources and related agreements. Like its predecessor, the current bill faced procedural challenges and competing priorities in committee, and did not reach the floor for a vote before lawmakers recessed.

Issa and his co-sponsors have framed the effort as necessary to illuminate so-called abuses in the U.S. litigation system by requiring the identity of third party funders to be disclosed to courts and opposing parties. But the repeated failure of similar bills to gain traction reflects deep partisan and practical concerns. Opponents argue that broad disclosure mandates could chill legitimate funding arrangements and impede access to justice, while supporters insist that transparency is essential to protect defendants and the legal system from hidden financial interests.

The stall of this latest proposal comes amid other congressional efforts on litigation finance, including separate proposals to address foreign funding in U.S. courts, but underscores the political and policy challenges in regulating private capital in civil litigation. With the bill pulled, stakeholders will watch for whether future iterations emerge in committee or form the basis of negotiations in upcoming sessions.

Commercial Regulatory Issues

Malaysian Bar Backs Arbitration Funding Reform

By John Freund |

The Malaysian Bar has publicly endorsed Malaysia’s newly implemented legislative framework governing third party funding in arbitration, while cautioning that all stakeholders must remain vigilant as the regime is put into practice. The comments come as Malaysia formally joins a growing group of jurisdictions that have moved to regulate litigation and arbitration funding rather than prohibit it outright.

An article in Business Today Malaysia reports that the Malaysian Bar welcomed the coming into force of the Arbitration Amendment Act 2024 on 1 January 2026, which abolishes the long standing common law doctrines of maintenance and champerty in the context of arbitration. The new law expressly permits third party funding for arbitral proceedings and introduces a regulatory structure aimed at balancing access to justice with procedural fairness and independence. According to the Bar, the reforms are a positive and necessary step to ensure Malaysia remains competitive as an international arbitration seat.

The legislation includes requirements for funded parties to disclose the existence and identity of any third party funder, addressing concerns around conflicts of interest and transparency. It also introduces a code of practice for funders, designed to ensure that funding arrangements do not undermine counsel independence, tribunal authority, or the integrity of the arbitral process. The Malaysian Bar emphasised that funders should not exert control over strategic decisions, evidence, or settlement, and that tribunals retain discretion to manage funding related issues, including costs and security for costs applications.

While acknowledging ongoing concerns that third party funding could encourage speculative or unmeritorious claims, the Bar took the position that ethical and well regulated funding should not be viewed as a threat to arbitration. Instead, it framed funding as a legitimate tool that can enhance access to justice for parties who might otherwise be unable to pursue valid claims due to cost constraints. The Bar called on lawyers, arbitrators, institutions, and funders to uphold both the letter and the spirit of the new law as it is implemented.

Commercial People Moves

Omni Bridgeway Appoints Nathan Krapivensky as Investment Advisor

By John Freund |

Global litigation funder Omni Bridgewayhas announced the appointment of Nathan Krapivensky as an Investment Advisor, reinforcing the firm’s ongoing focus on deepening its investment expertise and strengthening origination capabilities across complex disputes.

Omni Bridgeway states that Krapivensky joins the business with extensive experience spanning litigation finance, complex commercial disputes, and investment analysis. In his new role, he will advise on the assessment and structuring of potential investments, working closely with Omni Bridgeway’s global investment teams to evaluate risk, quantum, and strategic considerations across funded matters. The appointment reflects the firm’s continued emphasis on disciplined underwriting and the development of sophisticated funding solutions for corporate clients, law firms, and claimants.

According to the announcement, Krapivensky brings a background that combines legal insight with commercial and financial acumen, positioning him to contribute meaningfully to Omni Bridgeway’s case selection and portfolio construction processes. His experience in analysing disputes at various stages of the litigation lifecycle is expected to support the firm’s efforts to deploy capital efficiently while maintaining rigorous investment standards. Omni Bridgeway highlighted that the role is advisory in nature, underscoring the importance of independent, high-quality judgment in evaluating opportunities across jurisdictions and asset classes.

The hire also aligns with Omni Bridgeway’s broader strategy of investing in talent as competition within the litigation funding market intensifies. As funders increasingly differentiate themselves through expertise rather than capital alone, senior advisory appointments have become a key lever for firms seeking to enhance credibility with sophisticated counterparties. By adding an experienced investment advisor, Omni Bridgeway signals its intention to remain at the forefront of the market for complex, high-value disputes.