Congress urged to address foreign litigation funding

What’s happening: The Michigan Chamber is urging Congress to advance bipartisan legislation aimed at increasing transparency around foreign-funded lawsuits and protecting U.S. businesses and courts from foreign interference.

Why it matters: Third-party litigation funding (TPLF) allows outside investors to finance lawsuits in exchange for a share of any settlement or award.

• The practice has grown rapidly with the global market estimated at $39 billion. Yet funding arrangements can remain hidden from courts and opposing parties – raising serious questions about who may be financing litigation and what influence they may have.

The concern: Foreign governments or other foreign interests could use litigation funding to secretly bankroll lawsuits against American companies or otherwise seek to influence or exploit the U.S. legal system.

The solution: The Michigan Chamber supports H.R. 2675, bipartisan legislation requiring disclosure of foreign litigation funding and barring foreign governments from secretly financing lawsuits against U.S. companies.

The Michigan connection: This push mirrors work underway here at home. The Michigan Chamber and Michigan Alliance for Legal Reform are advocating for HB 5281 to bring greater transparency and guardrails to TPLF in Michigan – including restrictions on foreign adversary funding. The legislation passed on a bipartisan 60-45 vote earlier this year.

• Together, the state and federal efforts reflect a broader push for greater transparency around who is financing lawsuits and what role those funders can play.

Where it stands: The U.S. House Judiciary Committee approved H.R. 2675, and the legislation was formally reported to the House in June. The Michigan Chamber recently joined other business organizations in calling on Congress to move the legislation forward.

For questions or more information contact Randy Gross.