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Republican Senators Reintroduce Litigation Funding Disclosure Bill

February 15, 2019

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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Ireland’s High Court Affirms Power to Order Disclosure of Third-Party Funding

Ireland's High Court has confirmed that it holds a general power to order the disclosure of third-party litigation funding arrangements, in a ruling that carries particular weight in a jurisdiction where such funding remains largely prohibited.

As reported by the Law Society of Ireland Gazette, the decision came in QPQ Limited v Schute [2026] IEHC 463, an intellectual-property dispute in which the defendant uncovered WhatsApp messages during discovery suggesting that a third party had funded the plaintiff's proceedings and might provide further backing. The defendant sought disclosure of the funding arrangements, arguing it was entitled to know its "true adversary."

Mr Justice Twomey held that the court could order disclosure of third-party funding independent of how that funding came to the court's attention. He drew a distinction between funding provided by parties with an existing interest in the litigation, such as shareholders or creditors, and funding from otherwise unconnected third parties.

"Certain forms of third-party funding of litigation … constitute a tort or crime," the judge observed. "Accordingly, there is a public interest in the exposure of such funding, if it exists."

The ruling underscores the continued restrictiveness of the Irish position, where the torts of maintenance and champerty still limit third-party funding outside a narrow set of exceptions. For non-Irish parties involved in commercial disputes with an Irish dimension, the decision is a reminder that funding arrangements assumed to be confidential elsewhere may be exposed to disclosure, and scrutiny, before the Irish courts.

Commercial

Investors Increasingly Bypass Funds to Back Litigation Directly

Institutional investors that have long fueled litigation finance through dedicated funds are increasingly going direct, putting capital straight into law-firm and case portfolios rather than routing it through intermediary funders. The shift lets them trim fees and exert greater control over the legal assets they hold.

As reported by Bloomberg Law, the trend marks one of the more pronounced changes in the market in recent years. "It's one of the clearest shifts in the market over the last couple of years," said Jim Batson, chief investment officer at Siltstone Capital.

For investors, the appeal is straightforward. Direct exposure removes a layer of management fees and gives allocators a closer view of underwriting, case selection, and portfolio construction. It also reflects a maturing asset class in which sophisticated capital is increasingly comfortable evaluating legal risk on its own terms.

The move is not without trade-offs. Intermediary funders bring specialized diligence, origination networks, and risk-management expertise that direct investors must otherwise build in-house. Litigation outcomes remain idiosyncratic and slow to resolve, and concentrated direct positions can magnify the timing and binary risks that diversified funds are designed to smooth.

The development lands amid broader signs of a market in flux, from large arbitration awards to high-profile funder insolvencies. As more capital seeks direct access to legal assets, the balance between funders and the investors who back them may continue to shift, with implications for pricing, transparency, and how litigation risk is ultimately distributed.

Commercial

Woodville Collapse Deepens as Administrators Probe £249M in Loans and Misapplied Investor Funds

The administration of Woodville Consultants, the litigation funder that helped bankroll the wave of UK motor-finance claims, is proving more consequential than its modest headcount suggested, with administrators now examining hundreds of millions of pounds in outstanding loans and the possible misapplication of investor funds.

As reported by Legal Futures, Woodville had funded more than 300,000 claims since 2019 and carried some £249 million in outstanding loans at the point of collapse — figures that stand in stark contrast to its staff of roughly 10. As many as six law firms are understood to be affected.

The funder's model required fixed quarterly returns and fixed repayment dates without reference to actual case recoveries, an arrangement fundamentally misaligned with the uncertain timelines of litigation. That mismatch became untenable once the Financial Conduct Authority's motor-finance redress scheme was suspended, leaving the underlying claims effectively on hold and cutting off the repayments Woodville expected from partner firms.

Administrators are now investigating how the company funded quarterly returns and redemptions to loan-note holders before its collapse, alongside potential wrongdoing and the misapplication of investor funds by directors and introducers. Joint owners Peter Legge and Ann Marie Bell opposed the administration order.

The failure follows a familiar pattern. Fenchurch Legal entered administration in April 2026 and Katch Fund Solutions in December 2025, both citing the prolonged resolution of motor-finance claims — underscoring the sector-wide strain the FCA's redress delays have placed on funders exposed to those cases.