Advocacy News – May 14, 2026
What’s happening: The State House passed HB 5281 this week on a bipartisan vote of 60-45, marking a step toward establishing clear rules and oversight for third party litigation funding (TPLF) in Michigan.
Background: TPLF allows outside financers to fund lawsuits in exchange for a share of a potential settlement or award. In Michigan, the practice currently operates with little to no transparency or regulatory oversight – raising serious concerns about disclosure, influence and consistency within the legal process and system.
Why it matters: These gaps in transparency can contribute to higher legal costs and lawsuit abuse, even for employers not directly involved in litigation. National research estimates broad economic impact, including Michigan losing out on nearly 100,000 job opportunities and $3,000 per family in in hidden, increased costs.
What’s in the bill: HB 5281 establishes commonsense guardrails without prohibiting TPLF:
- Requires funder disclosure and registration, ensuring transparency in TPLF funded cases.
- Prohibits funder influence on case outcomes so justice remains the guiding compass.
- Caps funder earnings from awards and settlements, ensuring plaintiffs receive the compensation they deserve.
- Bans foreign adversaries from funding lawsuits, protecting national security interests.
What we’re saying: The MI Chamber applauds this bipartisan effort to bring greater transparency, balance and predictability to the legal system for Michigan job providers. The Chamber is also a proud member of the Michigan Alliance for Legal Reform, a coalition dedicated to advocating for targeted legal reforms and restoring balance and fairness in Michigan’s legal system.
Go deeper: Learn more and watch committee testimony in support of TPLF reform.