Stay on top of regulatory updates taking place throughout various jurisdictions across the globe.

In a pointed rebuttal to a recent Wall Street Journal editorial, Fortress Investment Group President Jack Neumark has challenged claims that litigation funders—particularly those with foreign investors—exploit U.S. tax loopholes to avoid paying capital gains taxes on lawsuit proceeds.

The Wall Street Journal published an editorial titled “Ending a Tax Break for Lawsuits” supporting a legislative proposal from Senator Thom Tillis and Representative Kevin Hern that would increase taxes on litigation finance returns. In response, The Wall Street Journal published Neumark’s letter, where he firmly stated that Fortress is an American company whose legal asset investments are made by U.S.-based leadership and taxed under standard corporate or ordinary income rules—not as capital gains.

Neumark argued that Fortress-managed funds do not provide any capital gains tax exemption for foreign investors, pushing back against the editorial’s implication that litigation funding primarily benefits non-U.S. entities seeking to exploit the American legal system. He defended litigation finance as a tool for U.S. businesses to more efficiently pursue justified legal claims, reducing costs and allowing for reinvestment in growth and job creation.

Challenging the editorial’s portrayal of funded claims as “dubious,” Neumark highlighted that many have resulted in jury verdicts or settlements amounting to billions. He underscored the legitimacy of the U.S. court system in weeding out meritless suits and ensuring fair compensation for real damages.

Neumark concluded by warning that the Tillis-Hern tax measure would extend well beyond foreign investors, affecting domestic investors such as pension funds and effectively doubling tax rates on companies pursuing litigation—creating a precedent for ideologically motivated tax targeting.

This public defense signals a broader resistance among funders to legislative efforts that blur the lines between tax reform and ideological opposition to litigation finance. As these proposals gain traction, expect more funders to enter the public arena to protect what they view as vital access-to-justice infrastructure.

LionFish Litigation Finance Ltd has released a new suite of model litigation funding documents, updating its original set from February 2021. The revision comes on the heels of the Civil Justice Council’s (CJC) Final Report on Litigation Funding, issued on 2 June 2025, which calls for a regulatory structure informed by best practices, including key principles published by the European Law Institute (ELI) in October 2024.

A LionFish press release details that the updated suite incorporates several of the ELI Principles (notably 4-12) and broader CJC recommendations, except where doing so would require legislative or procedural reform. LionFish’s goal, according to Managing Director Tets Ishikawa, is not to dictate market norms but to foster industry-wide standardisation and efficiency. This proactive move is also intended to spark further collaboration between funders, insurers, and legal practitioners to develop trade practices akin to those in mature financial markets, such as those promoted by the Loan Market Association and the International Swaps and Derivatives Association.

The new suite includes three core documents: a litigation funding agreement, a priorities deed to define proceeds distribution, and an assignment deed for insurance benefits. Notably, LionFish has also added documentation for co-investment arrangements, reflecting a growing trend in syndicated funding deals. The funder has already closed seven such transactions.

Managing Director Tanya Lansky emphasised that while litigation funding remains complex, making documentation public enhances transparency and facilitates quicker deal closings—an essential factor for sustaining market growth.

As litigation finance continues to mature, this move by LionFish highlights a shift toward professionalisation and standardisation. With regulators increasingly focused on transparency and fairness, such initiatives may set a de facto benchmark for others in the industry. The question remains: will other funders follow suit, or will regulatory mandates be needed to compel alignment?

As LFJ reported last week, momentum continues to build behind state-level legislative proposals that seek to impose new rules governing the use of third-party litigation funding in the U.S. 

Reporting by the AP covers a new development in the Georgia state legislature, where the Senate has unanimously passed the second part of Gov. Brian Kemp’s legislative package aimed at tort reform and third-party litigation funding. Senate Bill 69, which passed the Senate last Thursday with 52 Yea votes, amends state law to include new provisions governing the involvement of litigation funders.

SB 69 requires third-party funders register with Georgia’s Department of Banking and Finance, as well as prohibiting any foreign individuals or organisation from funding litigation in the state. The bill also sets out disclosure requirements for cases where a litigation funding agreement is present and puts in place restrictions on a funder’s ability to control the litigation process.

Senate President Pro Tem John Kennedy, a sponsor of the bill, said that SB 69  “combats the growing foreign influence” in Georgia lawsuits, and argued that the new rules contained within the bill act as a “consumer protection measure”. The Georgia Trial Lawyers Association, which opposes these attempts at reform, stated that there is “still work to be done to ensure SB 69 fairly addresses its intended purpose”. 

SB 69 will now join SB 68, the part of Gov. Kemp’s package that primarily deals with tort reform, to be debated in the House and scrutinised by a bi-partisan subcommittee convened by House Rules Committee Chairman Butch Parrish. 

The full text and status of Senate Bill 69 can be accessed on the Georgia General Assembly website.