In a significant policy shift, Oklahoma has enacted legislation targeting foreign influence in its judicial system through third-party litigation funding. Signed into law by Governor Kevin Stitt, the two-pronged legislation not only prohibits foreign entities from funding lawsuits in the state but also imposes a $500,000 cap on non-economic damages in civil cases—excluding exceptions such as wrongful death. The new laws take effect November 1, 2025.

An article in The Journal Record notes that proponents of the legislation, including the Oklahoma Civil Justice Council and key Republican lawmakers, argue these measures are necessary to preserve the integrity of the state's courts and protect domestic businesses from what they view as undue interference. The foreign funding restriction applies to entities from countries identified as foreign adversaries by federal standards, including China and Russia.

Critics, however, contend that the laws may undermine access to justice, especially in complex or high-cost litigation where third-party funding can serve as a vital resource. The cap on non-economic damages, in particular, has drawn concern from trial lawyers who argue it may disproportionately impact vulnerable plaintiffs without sufficient financial means.

Oklahoma’s move aligns with a broader national trend of state-level scrutiny over third-party litigation funding. Lawmakers in several states have introduced or passed legislation to increase transparency, impose registration requirements, or limit funding sources.

For the legal funding industry, the Oklahoma law raises pressing questions about how funders will adapt to an increasingly fragmented regulatory landscape. It also underscores the growing political sensitivity around foreign capital in civil litigation—a trend that could prompt further regulatory action across other jurisdictions.

A new opinion piece pushes back against recent cultural and political rhetoric characterizing third-party litigation funding as a partisan instrument, arguing instead that it remains a neutral financial tool in the legal system.

An article in the Consumer Choice Center emphasizes that while some political actors and commentators have portrayed litigation funding as a means to challenge so-called “woke” corporations, such framing misconstrues the role and function of funders. According to the piece, litigation funding serves a straightforward purpose: to provide capital to litigants—be they individuals or entities—who lack the resources to pursue claims. The authors argue that this mechanism is neither inherently ideological nor driven by political outcomes.

The article calls for clearer regulatory standards and heightened transparency to avoid potential abuses and maintain public trust. It warns against allowing litigation finance to be co-opted by political narratives, which could derail substantive policy debates around disclosure, ethical boundaries, and market oversight.

In a landscape increasingly shaped by culture wars, this intervention underscores a foundational point: litigation finance is not a proxy battlefield for partisan interests, but a tool with the potential to improve access to justice—provided it is governed with clarity and care.

A recent opinion piece in The Wall Street Journal advocates for closing tax loopholes that allow foreign investment funds to avoid U.S. taxes on profits earned from financing lawsuits against American companies. The editorial argues that the current tax code inadvertently incentivizes predatory litigation funding practices by exempting foreign investors from taxation on lawsuit proceeds, thereby disadvantaging domestic businesses.

The article contends that this exemption creates an uneven playing field, enabling foreign entities to profit from U.S. legal actions without contributing to the tax base. It suggests that such practices not only strain the judicial system but also impose additional burdens on American companies, which must defend against potentially frivolous or opportunistic lawsuits financed by these untaxed foreign investments.

The editorial calls on Congress to reevaluate and amend the tax code to eliminate these exemptions. By doing so, it aims to deter exploitative litigation funding and ensure that all investors, regardless of nationality, are subject to the same tax obligations when profiting from the U.S. legal system.

The piece emphasizes that such reforms would promote fairness and protect domestic businesses from undue legal and financial pressures.

Backlit Capital Solutions has announced the launch of its full-service legal finance consultancy. The firm aims to provide comprehensive funding solutions for legal claims, offering services that include litigation finance, arbitration funding, and judgment enforcement strategies.

An article in PR Newswire states that Backlit Capital Solutions is positioning itself as a comprehensive provider in the legal finance sector, aiming to serve a diverse clientele that includes claimants, law firms, lenders, and investors. The firm's service offerings encompass litigation finance, arbitration funding, and judgment enforcement strategies, indicating a broad approach to legal funding solutions.

The launch of Backlit Capital Solutions reflects a growing trend in the legal finance industry, where firms are expanding their services to address the multifaceted needs of legal claimants and their representatives. By offering a suite of services under one roof, Backlit Capital Solutions aims to streamline the funding process and provide tailored solutions to its clients.

As the legal finance landscape continues to evolve, the entry of firms like Backlit Capital Solutions underscores the increasing demand for specialized financial services in the legal sector. Their comprehensive approach may set a new standard for how legal finance consultancies operate, potentially influencing the strategies of existing and emerging players in the market.

In a significant decision reinforcing the enforceability of international arbitration awards, the U.S. Supreme Court has reinstated a $500 million award in a dispute between two Indian companies.

An article in Bloomberg Law states that the case, CC/Devas (Mauritius) Ltd. v. Antrix Corp. Ltd., involved Antrix Corporation, a company owned by the Indian government, and CC/Devas, a Mauritius-based entity. The dispute centered on a failed satellite agreement, leading to an arbitration award in favor of CC/Devas. The U.S. Court of Appeals for the Ninth Circuit had previously vacated the award, asserting that additional connections to the U.S. were necessary to establish jurisdiction.

However, the Supreme Court, in an opinion authored by Justice Samuel Alito, rejected this view, stating that once the FSIA's explicit requirements—subject matter jurisdiction and proper service—are met, personal jurisdiction over a foreign sovereign is automatic. The unanimous ruling emphasized that the FSIA was designed to clarify governing standards, not to introduce hidden requirements.

This decision has significant implications for the legal funding industry, particularly in the context of international arbitration. By affirming the enforceability of foreign arbitration awards under the FSIA, the ruling provides greater certainty for funders investing in cross-border disputes involving sovereign entities. It underscores the U.S. commitment to upholding international arbitration agreements, thereby enhancing the attractiveness of the U.S. as a venue for enforcing such awards.

The Court did not address potential constitutional questions related to due process, leaving that issue open for future litigation. Nonetheless, the ruling is a clear affirmation of the FSIA's provisions and their role in facilitating the enforcement of international arbitration awards in U.S. courts.

In a landmark resolution, Spain has agreed to pay €32 million ($37 million) to U.S.-based Blasket Renewable Investments, marking its first compliance with an international arbitration award stemming from the country's 2013 renewable energy subsidy cuts.

An article in Reuters reports that the original €23.5 million award was granted in 2021 by the International Centre for Settlement of Investment Disputes (ICSID) to Japan’s JGC Holdings Corporation. Blasket later acquired the rights to this award. The payment, which includes interest, was facilitated through funds seized in Belgium from Eurocontrol payments owed to Spain, following a Belgian court's approval.

This case is distinct as it involves a non-EU investor, thereby sidestepping the European Commission's stance that intra-EU arbitration awards violate EU state aid rules. Spain has faced 51 arbitration claims over its energy reforms, with 27 resulting in awards totaling approximately €1.5 billion. However, the government has managed to reduce the payable amount by about 85% through legal avenues.

The Blasket settlement could set a precedent for resolving similar disputes with non-EU investors, while Spain continues to contest awards involving EU-based claimants, citing EU legal constraints. 

In a closely watched decision, a federal judge has denied Apple’s attempt to compel Haptic Inc. to turn over litigation funding records in an ongoing patent infringement case.

According to Bloomberg Law, the dispute centers on Haptic’s claims that Apple’s iPhone “Back Tap” feature infringes on its patented technology. As part of its defense, Apple sought disclosure of communications between Haptic and its third-party funders, arguing the materials could reveal improper influence or strategic coordination.

The court, however, ruled in favor of Haptic, holding that the requested documents are protected under the work-product doctrine. This legal principle shields materials prepared in anticipation of litigation from disclosure, unless the opposing party demonstrates a substantial need. The judge emphasized that Apple had not met that burden, noting that the funder’s role did not compromise the independence of Haptic’s legal counsel or litigation strategy.

This decision is the latest in a series of rulings that underscore courts’ growing acceptance of litigation funding as a legitimate component of the civil litigation system. It also highlights the increasing legal clarity around funder-client relationships, especially regarding privilege and disclosure.

A new report from the Insurance Information Institute (Triple-I) is drawing attention to the growing intersection between third-party litigation funding, mass tort advertising, and rising insurance costs. The report argues that these trends are correlated and may also be fueling a cycle of litigation abuse that places upward pressure on insurance premiums across the country.

According to Insurance Journal, the Triple-I report signals growing concern among insurers about the litigation finance industry’s systemic impact on claim costs and rate-setting. The report claims that attorney advertising—often funded or indirectly supported by litigation financiers—has surged in recent years, particularly in areas like product liability, pharmaceuticals, and toxic exposure. The influx of cases, many involving large aggregations of claims, has increased both the frequency and severity of insurance payouts. Triple-I warns that this dynamic contributes to a “social inflation” effect, where legal costs outpace economic fundamentals.

The report calls for regulatory action and transparency, suggesting that clearer disclosure rules around third-party funding and advertising could help insurers, courts, and the public better assess the risks and incentives involved.

While the litigation finance industry has long argued that its capital helps level the playing field for under-resourced claimants, critics say the unchecked expansion of funding models and advertising tactics may tilt the balance toward profit over merit.

A U.S. bankruptcy judge has approved Steward Health Care System’s request to obtain a $127 million loan to fund litigation against its former executives and insiders. The embattled hospital operator, which filed for bankruptcy earlier this year, is targeting up to $2 billion in potential recoveries through legal action.

The financing arrangement—approved despite objections from several creditors—marks a critical step in Steward’s restructuring strategy, enabling the hospital network to pursue claims of mismanagement, breach of fiduciary duty, and possible fraudulent conveyances by former leadership. The proposed defendants in the litigation include members of Steward’s former executive team and affiliated entities involved in its rapid expansion and subsequent financial unraveling.

The loan is being provided by a group of new money lenders who will receive top-tier repayment priority from any litigation proceeds, a provision that stirred concern among some creditor groups during court proceedings. Critics argued the structure could reduce recovery prospects for unsecured creditors. However, the judge determined that the funding was both necessary and appropriately structured to pursue high-value claims that could ultimately benefit the estate.

Legal analysts note that this type of debtor-in-possession (DIP) financing for litigation expenses is becoming more common in large corporate bankruptcies, especially when internal mismanagement or fraud is suspected. For litigation funders and investors in legal finance, the Steward case underscores the growing intersection of bankruptcy proceedings and asset recovery litigation.

Dubai has enacted Law No. (2) of 2025 which cements the role of the DIFC Courts as a forum for cross-border litigation and arbitration.

According to the Government of Dubai's Official Gazette, the statute formalizes the structure of the DIFC Courts, mandating that all proceedings be conducted in English, and that judges convene hearings in-person or virtually. The law also grants the Chief Justice sweeping oversight, including the authority to issue procedural rules, supervise court officers, and approve judicial appointments.

The DIFC Courts maintain exclusive jurisdiction over civil, commercial, labor, and inheritance matters, while permitting opt-in jurisdiction for external parties by written agreement. The legislation promotes the recognition and enforcement of foreign judgments and arbitral awards, and grants the courts discretion to enforce non-Muslim rulings and appoint judicial custodians where appropriate.

With the repeal of DIFC Laws No. 10 and 12 of 2004, the new law takes immediate effect, positioning the DIFC Courts as a more robust and transparent judicial forum.