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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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Burford’s Q2 Profits Surge on New Capital

By John Freund |

Burford Capital has delivered its strongest quarterly performance in two years, buoyed by a swelling pipeline of high-value disputes and a fresh infusion of investor cash.

A press release in PR Newswire reveals that the New York- and London-listed funder more than doubled revenue and profitability in the three months to 30 June 2025. CEO Christopher Bogart credited “very substantial levels of new business” for the uptick, noting that demand for non-recourse financing remains “as strong as we’ve ever seen.”

The stellar quarter follows a lightning-quick, two-day debt offering in July that raised $500 million—capital Burford says will be deployed across a growing roster of commercial litigations, international arbitrations, and asset-recovery campaigns. Management also highlighted significant progress in portfolio rotations, underscoring the firm’s ability to monetise older positions while writing new ones at scale. Investors will get a deeper dive when Burford hosts its earnings call today at 9 a.m. EDT.

Burford’s results arrive amid heightened regulatory chatter in Washington and Westminster, yet the numbers suggest the industry’s largest player is unfazed—for now—by talk of disclosure mandates and tax levies. The firm emphasised that its legal-finance, risk-management and asset-recovery businesses remain uncorrelated to broader markets, a pitch that continues to resonate with pension funds and endowments hunting for alternative yield.

For litigation-finance insiders, Burford’s capital-raising prowess and improving margins could have ripple effects: rival funders may face stiffer competition for marquee cases, while law-firm partners might leverage the firm’s deeper pockets to negotiate richer portfolio deals.

Commercial Regulatory Issues

Australian High Court Ruling Strengthens Class-Action Funders

By John Freund |

Australia’s litigation-funding industry just received the judicial certainty it has craved.

Clayton Utz reports that the High Court, in Kain v R&B Investments [2025] HCA 26, unanimously held that the Federal Court may impose common-fund orders (CFOs) or funding-equalisation orders at settlement or judgment—ensuring all class members, not just those who signed funding agreements, contribute to a funder’s commission.

The Court reaffirmed Brewster’s bar on early-stage CFOs but found late-stage CFOs fall within the “just” powers of ss 33V(2) and 33Z(1)(g) of the Federal Court Act. Crucially, the bench rejected “solicitor common-fund orders,” ruling that any CFO benefiting plaintiff firms would contravene the national ban on contingency fees outside Victoria.

For funders, the decision cements the enforceability of commissions in nationwide class actions and removes a major pricing risk that had lingered since Brewster. For plaintiff firms, however, the ruling slams the door on a hoped-for new revenue channel.

The Court’s reasoning—tying funding commissions to equitable cost-sharing rather than contingency returns—will likely embolden funders to back larger opt-out claims, knowing a CFO safety-net is available at settlement. Meanwhile, plaintiff firms may redouble lobbying efforts for contingency-fee reform, particularly in New South Wales and Queensland, to reclaim ground lost in today’s judgment. Whether lawmakers move on that front will shape Australia’s funding market in the years ahead.

Case Developments Commercial

Locke Capital Backs Sarama in US $120 Million ICSID Claim Against Burkina Faso

By John Freund |

A junior gold explorer is turning to third-party capital to fight what it calls the expropriation of a multi-million-ounce deposit.

According to a press release on ACCESS Newswire, ASX- and TSX-listed Sarama Resources has drawn down a four-year, US $4.4 million non-recourse facility from specialist funder Locke Capital II LLC. The proceeds will pay Boies Schiller Flexner’s fees and expert costs in Sarama’s arbitration against Burkina Faso at the International Centre for Settlement of Investment Disputes (ICSID).

Sarama alleges the government retroactively revoked its Tankoro 2 exploration permit in 2023, halting development of the flagship Sanutura project. An arbitral tribunal chaired by Prof. Albert Jan van den Berg held its first procedural hearing on 25 July; Sarama’s memorial is due 31 October, and the company is seeking no less than US $120 million in damages.

Under the Litigation Funding Agreement, Locke’s recourse is limited to arbitration proceeds and the ownership chain of Sanutura; Sarama’s other assets remain ring-fenced. Repayment occurs only on a successful award or settlement, with Locke’s return calculated on a multiple-of-invested-capital basis and adjusted for timing.

The deal underscores the continued appetite of specialist funders for investor-state claims, particularly in the mining sector where treaty protections offer a clear legal framework and potential nine-figure payouts.