Litigation Funding Transparency Act of 2026
Senate Committee Targets Secret Lawsuit Investors Under Litigation Funding Transparency Act
A bill to amend title 28, United States Code, to increase transparency and oversight of third-party litigation funding in certain actions, and for other purposes.
Legislative Progress
Key Points
- This bill requires lawyers and people involved in large lawsuits, like class actions, to tell the court if an outside investor is paying for their legal fees. This includes disclosing the names of any companies or foreign governments that are providing money in exchange for a share of the final payout.
- The policy specifically targets 'third-party funders,' which are groups that pay for a lawsuit but aren't actually part of the case. It requires these funders to hand over their contracts so the judge and the other side can see the details of the financial deal.
- To protect legal fairness, the bill bans these outside investors from making decisions about legal strategy or settlement amounts. It also prevents them from seeing private or secret documents shared during the case unless a judge specifically allows it.
- The government would be required to post public reports every four months listing any foreign governments or foreign companies that are funding U.S. lawsuits. These reports would include the names of the funders, the specific cases they are involved in, and how much money they have provided.
Impact Analysis
Personal Impact
The bill restricts foreign-funded litigation, which could indirectly affect cases brought on behalf of undocumented individuals by nonprofits or legal organizations that receive foreign donations. While a carve-out exists for pro bono nonprofits, it excludes organizations funded by foreign persons or entities, potentially reducing the pool of available legal resources for some immigration-related class actions.
Broader Impacts
Milestones
Read twice and referred to the Committee on the Judiciary.
Sent to a congressional committee for expert review. The committee decides whether this bill moves forward.
Introduced in Senate
The bill was officially filed and given a number. It now enters the legislative queue.
Votes
No votes have been recorded for this legislation yet.
Related News
4 articles
Senate GOP aims to reveal companies funding lawsuits
Four U.S. Senate Republicans introduced a bill proposing rules to force companies that invest in lawsuits to identify themselves and refrain from interfering with settlements. The Litigation Funding Transparency Act would prevent funders from influencing litigation strategy and negotiations.
Litigation Funding Transparency Act Introduced in The Senate
The legislation would require parties to publicly disclose third-party litigation funding (TPLF), including funding from a foreign state, foreign person, or sovereign wealth fund, in mass tort and class action suits. Nonprofit legal organizations are exempt from these reporting requirements.
Senators Introduce Federal Legislation Mandating Disclosure of Third-Party Litigation Funding
The Litigation Funding Transparency Act of 2026, sponsored by Senators Grassley, Tillis, Kennedy, and Cornyn, represents a major push for transparency. It requires disclosure of funding agreements in class actions and MDLs and prohibits funders from controlling litigation strategy.
Source Information
Document Type
Congressional Bill
Official Title
A bill to amend title 28, United States Code, to increase transparency and oversight of third-party litigation funding in certain actions, and for other purposes.
Data Sources
Sponsor
Cosponsors
(3)Analysis generated by AI. Always verify with official sources.