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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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Trucking Group Presses Case Against Hidden Funding in Crash Lawsuits

The trucking industry is intensifying its scrutiny of third-party litigation funding, arguing that undisclosed outside capital is distorting the economics of truck-crash lawsuits and driving up the cost of doing business.

As reported by Land Line Media, the Owner-Operator Independent Drivers Association contends that outside investors — sometimes including foreign entities — are bankrolling crash litigation without transparency, prolonging cases, inflating damages, and leaving plaintiffs with modest returns while funders capture the larger share of any recovery. In some instances, the group warns, foreign government involvement raises national-security questions.

The article frames the issue against a wave of state-level legislation. Ohio has enacted disclosure requirements and barred foreign participation outright, with Rep. Meredith Craig declaring that "foreign actors have profited off Ohio citizens and businesses by investing in our courts." North Carolina has gone further, imposing an outright ban on third-party funding backed by fines of up to $50,000, while New Hampshire has prohibited financing by foreign governments and designated adversarial nations. Michigan has approved disclosure and registration requirements and banned foreign entities and incentive payments to attorneys and medical professionals.

Industry voices echo the theme: Tom Balzer of the Ohio Trucking Association argues that such funding "incentivizes frivolous claims, prolongs litigation, and inflates damages." Together, the measures reflect a coordinated push to bring litigation finance in trucking cases into public view — and a signal that transportation is becoming a central front in the national funding-transparency debate.

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Cross-Jurisdictional Analysis Charts Diverging Rules for Litigation Funding

Third-party litigation funding has grown into a multibillion-dollar force across major legal markets, yet the rules governing it remain strikingly inconsistent from one jurisdiction to the next, according to a new cross-jurisdictional analysis.

As reported by JD Supra, the review — authored by Arthur Coviello, Colin Dunn, and Mark Selwyn of WilmerHale — examines third-party funding across the United States, United Kingdom, Germany, China, and the Unified Patent Court. It notes that funders now manage billions in assets, with an estimated 20% committed to patent litigation, and that the U.S. leads but no longer dominates a market with established industries in the U.K., Germany, and China.

The authors highlight a sharp regulatory divergence. The United States has built a patchwork of state and federal measures, including disclosure requirements, while the U.K., Germany, China, and the UPC have largely declined to adopt comprehensive rules despite voicing similar concerns about conflicts of interest, funder control, and foreign influence.

The analysis catalogs recent developments: at least five bills pending in Congress addressing transparency and national-security concerns, the lingering effects of the U.K.'s 2023 PACCAR decision and the Civil Justice Council's call for "light touch" regulation, the European Commission's November 2025 decision not to adopt proposed funding rules, and the International Trade Commission's recent disclosure proposal. Without mandatory disclosure, the authors argue, judges and parties cannot reliably assess who holds a stake in a case or where potential conflicts may lie.

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Funding Collapse Ends Musical-Instrument Collective Action, Triggering £1.5M in Costs

A proposed UK collective action against five musical-instrument manufacturers has collapsed after its litigation funding fell through, leaving the proposed class representative facing roughly £1.5 million in costs.

As reported by Legal Futures, the Competition Appeal Tribunal addressed the withdrawal of five collective proceedings brought by proposed class representative Elisabetta Sciallis against Fender, Korg, Roland, Yamaha, and Casio. The claims followed a Competition and Markets Authority finding that the manufacturers had restricted retailers' freedom to set prices online.

Ms Sciallis had initially pointed to a funding agreement with North Wall Capital, first set at £6.5 million and later increased to £18 million as more claims were filed. Negotiations between the funder and her firm, Pogust Goodhead, ceased in early 2023, but the tribunal found that the funder's departure was not clearly disclosed until shortly before a March 2026 case management conference — at which point the firm confirmed the North Wall agreement had never materialised and that some 25 alternative funders had been approached without success.

The tribunal, which was critical of how the funding position had been communicated, ordered indemnity costs from April 2023 onward, including £608,000 summarily assessed for three defendants and interim orders of £850,000 for two others. Ms Sciallis withdrew all five proceedings ahead of a June 2026 hearing that would have examined the funding. The case underscores how quickly a collapse in third-party backing can unwind even a well-advanced collective claim.