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Fortress Pushes Back on Tillis-Hern Tax Proposal Targeting Litigation Funding

By John Freund |

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.

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John Freund

John Freund

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Behind the Scenes: How AI is Quietly Transforming the Legal Client Experience

The following was contributed by Richard Culberson, the CEO North America of Moneypenny, the world’s customer conversation experts, specializing in call answering and live chat solutions.

When people think about the legal client experience, they often picture what happens in the courtroom or during a critical client meeting. But increasingly, the most meaningful changes to how law firms, legal service providers and legal funders support their clients are happening out of sight, thanks to the power of artificial intelligence (AI). Whether it’s client intake, communication routing, or managing complex caseloads and funding relationships, AI is reshaping the way legal teams deliver service behind the scenes.

Across America, firms in all industries are turning to AI to enhance their people. The goal is simple: deliver faster, more personalized, and more efficient service. And when done right, the difference is both quiet and powerful.

At Moneypenny, we work with thousands of legal professionals every day, from solo attorneys to large firms and legal funders, helping them manage customer conversations and deliver great client service. We've seen firsthand how AI, when applied with care and purpose, can reshape the client experience from the inside out.

Easy Access to the Right Information

In any busy legal setting, timing is everything. Whether it’s a client call, intake conversation, or case status update, having instant access to accurate information is key. That’s where AI comes in. It can surface the right details in real time so teams can respond quickly and confidently.

Take legal funders, for example, they often need to assess case viability quickly, AI tools can instantly surface key case milestones, funding eligibility criteria, and prior correspondence to accelerate decision-making and reduce friction.

Smarter Call and Message Routing

Any business fields a wide range of calls and messages in a day, and not every inquiry belongs on the same desk. AI can now analyze keywords, tone, and context to route communication to the right person, and it does it automatically.

That means clients reach the right person faster, and your team spends less time untangling misdirected messages. In an industry where responsiveness matters, this kind of behind-the-scenes efficiency is a real win.

Getting Ahead of Client Needs

What’s more, AI doesn’t just react, it can anticipate too. By looking at past interactions and analyzing the data, it can identify patterns and flag issues before they arise.

Let’s say a client regularly asks about timelines or paperwork. AI can flag repetitive requests for status updates from claimant attorneys or co-counsel, prompting automated reporting or scheduled updates to improve transparency and communication between parties. This level of attentiveness not only reduces frustration but also builds trust and reassures clients, something especially valuable in the high-pressure, high-emotion legal industry.

Seamless Experience Across Channels

Today’s clients want to communicate on their own terms, whether that’s by phone, email, live chat, or text. And they expect consistency, no matter the channel. AI can help to make that happen.

By bringing together data from multiple sources, AI ensures that whoever answers the phone or replies to a message (whether that is call one or message five) has the full context. The result is that clients feel heard and known, not like they’re starting over every time, and it is that kind of continuity that can turn a routine exchange into a relationship.

Real-Time Support for Your Team

Think of AI as a digital assistant, offering prompts, surfacing information, and making sure the person handling the call or message has exactly what they need. It is helping people deliver their best work.

At Moneypenny, our AI tools support our legal receptionists during conversations, pulling up relevant details, suggesting next steps, and helping maintain a personalized touch even during peak periods. It’s about helping good people be even better at what they do.

Scaling the Personal Touch

There’s a common misconception that AI makes things feel impersonal or robotic. But when it’s used well, it actually allows businesses to be more personal, and at scale. Imagine being able to greet every client by name, remember their preferences, and respond in a way that feels tailored, even when your team is managing thousands of interactions. That’s what we aim to deliver every day. And AI makes it possible.

For legal funders juggling a portfolio of diverse cases and law firm partners, AI can ensure consistency in tone, terminology, and updates so that funders can maintain an attentive, personalized service level without scaling up staff headcount.

The Big Picture: Human + AI = A Better Experience

Whether you're running a law firm, operating a litigation finance business, or managing client services across the legal ecosystem, one thing is clear: clients want service that’s fast, accurate, relevant and personal. AI helps make that happen, by enhancing the human touch.

The real transformation isn’t just happening in space that the client sees but in the systems behind the scenes that power that experience. For leaders across legal industry and beyond, the takeaway is this: the future of service isn’t just about upgrading the visible. It’s about building smarter, more supportive systems that let your people do what they do best.

That’s where AI delivers its real value and where the real competitive edge lies. 

Litigation Funders Win Tax Reprieve

By John Freund |

Congressional negotiators shocked the legal-funding world by deleting, at the eleventh hour, a punitive tax on litigation-finance proceeds that had sailed through committee only weeks earlier.

An article in Law360 captures the collective sigh of relief: investment managers told the outlet that a 41 percent flat levy “would have erased double-digit IRRs overnight,” freezing new deals and stalling case portfolios mid-stream. Yet relief was tempered by unease. Lobbyists highlighted Biden-era IRS notices that already scrutinize fund structures, warning that future reconciliation cycles could revive similar measures under the banner of closing “loopholes.”

The scuttled clause, championed by Sen. Thom Tillis, aimed squarely at non-recourse funding agreements—lumping them with payday loans despite fundamental differences in risk and consumer exposure. Industry advocacy groups argued the tax would simply throttle access to counsel for under-capitalized plaintiffs, while doing little to curb perceived abuses.

For now, the world’s largest funders are pivoting to opportunity: several managers signaled press outreach emphasizing their role in financing meritorious claims after the Senate’s tacit endorsement. But as White House and Senate drafters restart budget talks this autumn, funders may find themselves again in fiscal cross-hairs—prompting fresh advocacy campaigns around transparency, consumer protection, and economic impact.

Jefferies Lines Up Capital for LA Wildfire Mass Torts

By John Freund |

As Southern California tallies the ruinous cost of this year’s Eaton and Palisades fires, Wall Street’s appetite for mass-tort risk is blazing. Bloomberg reporters tell Carrier Management that investment bank Jefferies Financial Group and rival Oppenheimer are courting plaintiffs’ firms with eight-figure credit lines to bankroll suits against Edison International and the Los Angeles Department of Water & Power.

An article in Carrier Management details solicitation emails in which brokers tout double-digit interest returns for lenders willing to absorb the high-stakes cost of expert testimony, aerial burn-mapping, and client acquisition. Litigation finance specialists already active in mass torts are circling as well, drawn to damages estimates topping $10 billion.

The report quotes Wake Forest law professor Samir Parikh, who calls wildfire finance litigation “the next evolution” of an industry that has made headlines backing opioids and talc claims. For funders, California wildfires offer scale, sympathetic plaintiffs and publicly traded utilities with insurance towers. Yet the capital churn also revives criticism from insurers that contend aggressive financing fuels social inflation. Skyward Specialty’s CEO recently vowed to shun counterparties dabbling in TPLF—a stance that could spread if wildfire verdicts balloon.

Whether Jefferies-style syndications become mainstream will hinge on judicial management of mass-tort inventories and on potential legislative moves to mandate financing disclosures in state courts. Either way, the embers of this year’s fires may ignite a new, high-profile proving ground for Wall Street’s legal-asset ambitions.