Community Spotlight: Guillermo Ruiz Medrano, Attorney, CUATRECASAS

Following this month’s elections in the United States, litigation funding leaders and industry observers have begun to try and predict what the change in government at the federal level may mean for efforts to increase regulation and oversight of the litigation finance industry.

An article in The American Lawyer looks at the issue of increased regulation for litigation funding through the lens of the election, getting the views of industry experts as to what approach the incoming GOP trifecta might take. With one piece of draft legislation focusing on funding disclosure already introduced to the House, courtesy of Rep. Darrell Issa of California, lawyers and funders alike are anxious to see whether the Trump administration will take a more combative approach to third-party funding.

Broadly speaking, the view from industry appears to be split on whether the attitudes of Congress and the White House will be aligned on this issue. Charles Agee, CEO of Westfleet Advisors, said that “regulating the litigation finance industry does not seem to be at the top of the agenda for the Trump administration”. Whilst Dai Wai Chin Feman, managing director at Parabellum Capital, noted that Trump has previously exhibited a trend towards appointing judges with less litigation experience, which may harm the industry as it could “inject more variability in litigation funders' ability to underwrite outcomes.” 

Paul Haskel, partner with Crowell & Moring, agreed that regulating third-party funding may not be a high priority for President Trump, but suggested that the commonly-repeated claim that funding acts as a route for foreign actors to malignly influence US interests could be “an appealing way for this administration to attack it.” Similarly, Mark Behrens of Shook Hardy & Bacon, suggested that over on Capitol Hill, “the new congressional leadership provides a reason for optimism that there will be increased attention paid to the disclosure of commercial third-party litigation financing and the involvement of foreign funders in U.S. litigation.” 

Seeking to gain some insight into any provisional policy position that the new administration might hold, The American Lawyer contacted the Trump transition team for a comment. However, spokesperson Karoline Leavitt did not provide a direct answer to the question, instead emphasizing that Trump had been re-elected “by a resounding margin giving him a mandate to implement the promises he made on the campaign trail.”