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Republican Senators Reintroduce Litigation Funding Disclosure Bill

A group of Republican Senators has reintroduced a bill that would mandate disclosure in class action and MDL contexts. The Senators first introduced the Litigation Funding Transparency Act (LFTA) last year, but it went nowhere. Now they are making another push with the same legislation.

As reported in Law.com, Senators John Cornyn of Texas, Thom Tillis of North Carolina, Chuck Grassley of Iowa, and Ben Sasse of Nebraska all proposed the legislation that seeks to mandate disclosure of third party financing in class actions and MDLs. The bill stipulates disclosure within 10 days of a case being filed, or 10 days after a litigation funding agreement is signed, assuming the agreement comes mid-case.

The bill would also require disclosure in the consumer legal funding context, as plaintiffs seeking cash advances against the outcome of their cases would also have to disclose their funding agreements.

Last year, the House of Representatives passed a narrower version of the bill, which stipulated disclosure only in class actions. Subsequent to that, the GOP Senators introduced the LFTA. That bill failed to make any traction, and that was during a GOP-led Congress. Now that the Democrats have taken control of the House, any push for regulating the legal industry is seen as having even less chance to reach approval.

Many are viewing the bill’s reintroduction as the result of a continued push by the U.S. Chamber of Commerce to regulate the litigation funding industry. Lisa Rickard, president of Chamber’s Institute for Legal Reform, recently issued a statement supporting the bill. “When litigation funders invest in a lawsuit, they buy a piece of the case; they effectively become real parties in interest. Defendants (and courts) have a right to know who has a stake in a lawsuit and to assess whether they are using illegal or unethical means to bring the action,” the statement reads.

Vannin Capital Managing Director, Michael German, had this to say: “The proposed Act is another example of special interest groups using their reach in Washington to implement legislation that goes well beyond the issue they purport to address. Vannin has been a vocal proponent of disclosure of (i) the fact that a litigant is funded and (ii) the identity of the funder. Any disclosure in excess of these facts is an overreach that does far more than solve the potential conflicts raised by Senator Grassley and his counterparts. Instead, the proposed Act would unfairly permit defendants facing legitimate lawsuits to gain an improper advantage, and force the parties and the courts into an irrelevant sideshow regarding funding terms.”

The bill’s reintroduction comes on the heels of the shock letter issued by GCs and senior litigators from 30 companies, asking the Advisory Committee on Civil Rules to mandate disclosure of all funding agreements in civil actions. Companies like Microsoft, General Electric, AT&T and Home Depot were all signatories of the letter.

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Case Developments Commercial

Sony and Apple Challenge Enforceability of Litigation Funding Models

By John Freund |

A pivotal UK court case could reshape the future of litigation finance agreements, as Sony and Apple reignite legal challenges to widely used third-party funding models in large-scale commercial disputes.

An article in Law360 reports that the two tech giants are questioning the validity of litigation funding arrangements tied to multibillion-pound cartel claims brought against them. Their core argument: that certain litigation funding agreements may run afoul of UK laws governing damages-based agreements (DBAs), which restrict the share of damages a representative may take as remuneration. A previous Court of Appeal decision in PACCAR Inc. v. Competition Appeal Tribunal held that some funding models might qualify as DBAs, rendering them unenforceable if they fail to comply with statutory rules.

This resurrected dispute centers on claims brought by class representatives against Apple and Sony over alleged anti-competitive behavior. The companies argue that if the funding arrangements breach DBA regulations, the entire claims may be invalidated. For the litigation funding industry, the outcome could severely curtail access to justice mechanisms in the UK—especially for collective actions in competition law, where third-party financing is often essential.

The UK’s Competition Appeal Tribunal previously stayed the proceedings pending clarity on the legal standing of such funding arrangements. With the dispute now heading back to court, all eyes will be on whether the judiciary draws a clear line around the enforceability of funder agreements under current law.

The decision could force funders to rework deal structures or risk losing enforceability altogether. As UK courts revisit the DBA implications for litigation finance, the sector faces heightened uncertainty over regulatory compliance, enforceability, and long-term viability in complex group litigation. Will this lead to a redefinition of permissible funding models—or to a call for legislative reform to protect access to collective redress?

Case Developments Commercial

Funder’s Interference in Texas Fee Dispute Rejected by Appeals Court

By Harry Moran |

A Texas appeals court has ruled that a litigation funder cannot block attorneys from pursuing a fee dispute following a remand order, reinforcing the limited standing of funders in fee-shifting battles. In a 2-1 decision, the First Court of Appeals found that the funder’s interest in the outcome, while financial, did not confer the legal authority necessary to participate in the dispute or enforce a side agreement aimed at halting the proceedings.

An article in Law360 details the underlying case, which stems from a contentious attorney fee battle following a remand to state court. The litigation funder, asserting contractual rights tied to a funding agreement, attempted to intervene and stop the fee litigation between plaintiffs' and defense counsel. But the appellate court sided with the trial court’s decision to proceed, emphasizing that only parties directly involved in the underlying legal work—and not third-party financiers—are entitled to challenge or control post-remand fee determinations. The majority opinion concluded that the funder’s contract could not supersede procedural law governing who may participate in such disputes.

In dissent, one justice argued that the funder’s financial interest merited consideration, suggesting that a more expansive view of standing could be warranted. But the majority held firm, stating that expanding standing would invite unwanted complexity and undermine judicial efficiency.

This decision sends a strong signal to funders operating in Texas: fee rights must be contractually precise and procedurally valid. As more funders build fee recovery provisions into their agreements, questions linger about how far those rights can extend—especially in jurisdictions hesitant to allow funders a seat at the litigation table.

Commercial Regulatory Issues

Oklahoma Moves to Restrict Foreign Litigation Funding, Cap Damages

By John Freund |

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.