Senators John Kennedy (R-La.), Chuck Grassley (R-Iowa), Thom Tillis (R-N.C.), and John Cornyn (R-Texas) have introduced the Litigation Funding Transparency Act. The proposed legislation would require disclosure of third-party funding in class action or mass tort lawsuits, including when the funder is a foreign state, foreign person, commercial enterprise, or sovereign wealth fund not party to the lawsuit.
Kennedy stated, “The American people deserve to know when corporations and foreign states pour money into class action lawsuits to influence outcomes. I’m proud to work together with my friend Chairman Grassley to introduce the Litigation Funding Transparency Act, which would lift the lid on the entities funding important legal battles in our country.”
Grassley commented, “Transparency brings accountability. For too long, obscure third-party litigation funding agreements have secretly funneled money into our civil justice system without any meaningful oversight. Americans should know if there are undue pressures at play that could needlessly prolong litigation, harm claimants’ interests or benefit foreign adversaries. The Litigation Funding Transparency Act strikes the right balance of sunshine, while protecting Americans’ access to justice.”
Tillis said, “Predatory litigation financing allows outside funders, including those backed by foreign governments, to profit off our legal system, driving up costs for families and delaying justice. This legislation will bring overdue transparency and accountability to these abusive practices.”
Cornyn added, “By requiring the disclosure of third-party litigation funding, this commonsense bill would restore transparency and accountability to a system that has been plagued by dark money and foreign influence for far too long, and I’m proud to support it.”
Both domestic and international entities currently invest billions of dollars in U.S. third-party litigation financing as a way to influence case results.
The act is supported by several organizations such as the U.S. Chamber of Commerce, American Property Casualty Insurance Association (APCIA), National Insurance Crime Bureau (NICB), and High Tech Inventors Alliance.
Stephen Waguespack from the U.S. Chamber of Commerce Institute for Legal Reform said: “Outside financiers treat our court system like a casino. They drive up costs for consumers and put our national and economic security at risk. Americans should not be taken advantage of in our own courtrooms. All parties involved in class actions and multi-district litigation cases should know who is secretly bankrolling the cases and manipulating the outcomes for profit. Requiring the disclosure of these hidden financial interests will protect American businesses and safeguard the integrity of our justice system. The U.S. Chamber of Commerce thanks Senators Grassley, Tillis, Kennedy and Cornyn for their leadership on this critical issue and we encourage the Senate to advance this legislation.”
Sam Whitfield from APCIA stated: “APCIA strongly supports Senator Grassley’s Litigation Funding Transparency Act. Bringing transparency to third party litigation funding is a commonsense step that protects consumers and strengthens the integrity of our civil justice system. We applaud Senator Grassley’s leadership in advancing reforms that promote fairness and accountability.”
David J. Glawe from NICB noted: “From on-the-ground investigations of criminal fraud rings to sophisticated analytics of litigation marketing campaigns, NICB has seen firsthand how third-party litigation funding can serve as a facilitator of insurance fraud, which increases costs for everyone. NICB applauds Chairman Grassley’s introduction of the Litigation Funding Transparency Act, which will help combat the improper incentives that attract fraudsters through improved transparency and accountability.”
Dave Jones from High Tech Inventors Alliance remarked: “We thank Chairman Grassley for taking up this critically important issue and commend him for introducing legislation that would improve transparency regarding who is funding litigation in U.S. courts and whether these funders are improperly controlling plaintiffs’ litigation decisions. For too long, a lack of transparency has allowed funders to control litigation against U.S. companies from the shadows, while often themselves being funded or controlled by anonymous foreign investors and foreign governments’ sovereign wealth funds. Congress should act to require much needed transparency to prevent hedge funds and foreign interests from secretly manipulating our legal system to the detriment of U.S. companies and the broader U.S. economy.”
Senator Kennedy has previously advocated against concealed third-party lawsuit funding through measures such as his Protecting Our Courts from Foreign Manipulation Act.
According to his official website, Senator Kennedy represents Louisiana in Washington D.C., operates offices throughout Louisiana—including Alexandria, Baton Rouge, Lake Charles, Monroe, New Orleans and Shreveport—and advances policies supporting veterans, farmers, small businesses as well as national security concerns.
The full text of this bill is available online.
