Issa, House Colleagues Launch Reform of Third-Party Financed Civil Litigation
Washington, D.C. – Congressman Darrell Issa, Chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence and the Internet, Congressman Scott Fitzgerald (WI-05), and Congressman Mike Collins (GA-10) introduced HR 1109 – The Litigation Transparency Act of 2025.
This is breakthrough legislation that will require the disclosure of parties receiving payment in civil lawsuits.
In hundreds of cases every year and in greater frequency, civil litigation is being funded by undisclosed third-party interests as an investment for return – including from hedge funds, commercial lenders, and sovereign wealth funds operating through shell companies. Third-party litigation funding also poses unique challenges in patent litigation cases, where too often investor-backed entities seek large settlements against American companies, distorting the free market and stifling innovation. This widespread anti-transparency environment requires a legislative remedy that provides disclosure of investors receiving payment based on the outcome of a case. The bill will also require disclosure of the financing agreement between investors and parties to these civil actions.
“Our legislation targets serious and continuing abuses in our litigation system that distort our system of justice by obscuring public detection and exploiting loopholes in the law for financial gain. Our approach will achieve a far better standard of transparency in the courts that people deserve, and our standard of law requires,” said Rep. Issa. “We fundamentally believe that if a third-party investor is financing a lawsuit in federal court, it should be disclosed rather than hidden from the world and left absent from the facts of a case.”
“As a former state legislator, I helped usher in laws to mandate disclosure of TPLF in Wisconsin courts. This ensured parties were aware of all stakeholders who had a financial interest in the outcome of litigation. These commonsense disclosure laws should similarly be required in federal courts, where the stakes can be higher,” said Rep. Fitzgerald. “I’m proud to join Congressman Issa in bringing needed transparency to our courtrooms.”
“Transparency in our legal system is essential to protecting industries vital to Georgia and America’s economy from unfair litigation practices. I have been advocating for tort reform for years and will continue the fight to ensure that lawsuits are fair and not driven by hidden third-party investors,” said Rep. Collins.“The Litigation Transparency Act will provide much-needed disclosure, safeguarding both businesses and consumers from the rising costs and legal abuse that result from secretive litigation funding.”
The Litigation Transparency Act of 2025 also received support from the following:
Consumer Technology Association (CTA): “Patent trolls and their financiers exploit loopholes to ambush American innovators with frivolous lawsuits – often bankrolled by shadowy hedge funds or even adversarial nations. The Litigation Transparency Act forces third-party funders into the light, disarming these bad actors and protecting the entrepreneurs driving our economy. This bill ensures that our legal system defends innovation, not profiteers.”
Google: “We strongly support Rep. Issa’s bill, which would bring much-needed transparency to the judicial system. Too often today, parties don't know who is funding the litigation against them – and as a result, who might have access to commercially sensitive information shared during discovery. This common-sense approach would help parties know who is actually on the other side of litigation, reveal potential conflicts of interest, and promote fairness in the judicial system” - Halimah DeLaine Prado, Google General Counsel
Consumer Choice Center: “Americans deserve a legal system that is not only accountable and fair, but transparent. Those gambling on the outcomes of our judicial system through third-party litigation finance are free to take the risk, but judges and juries deserve to know who they are. That's why the Litigation Transparency Act is such an important bill to rebalance our civil justice system and promote legal reform for everyday American consumers and citizens. Disclosing who stands to benefit financially from legal procedures and actions would be an excellent first step in restoring confidence in the sanctity of our courts. The Consumer Choice Center applauds Rep. Issa's efforts to highlight this issue that will provide a model for our country and the rest of the world.”
U.S. Chamber of Commerce: “Rep. Issa recognizes the major risk third-party litigation funding poses to America's economic and national security. His legislation will help protect the integrity of our judicial system by ensuring that outside financiers are not secretly directing or profiting from litigation they are funding. It is common sense that defendants, plaintiffs, and judges should know who is seeking to profit off litigation. The U.S. Chamber of Commerce thanks Rep. Issa for his continued leadership and strong work on this important issue.”
National Association of Mutual Insurance Companies (NAMIC): “The court system was never meant to be used as a for-profit investment scheme. Frivolous and excessive litigation driven by investors has raised costs for Americans across the country, including the cost of insurance. When disputes end up in court, all the relevant parties should know everyone involved on each side, and this legislation will ensure that no one in the court system operates in shadow. NAMIC applauds Chairman Issa for his steadfast leadership on this front and urges Congress to advance this important legislation.”
The American Property Casualty Insurance Association (APCIA): “Legal system abuse is a significant factor impacting insurance affordability and availability in the states and across the country. By its very nature, third-party litigation funding contributes to the growth in lawsuits and increases litigation costs, both of which increase the cost of insurance overtime for every American family, individual, and business who purchases it. Chairman Issa’s legislation is a significant step forward to address the negative impacts of litigation funded by third party investors by requiring disclosure of third-party litigation financing to the parties and the court in all federal civil actions. APCIA appreciates Chairman Issa’s leadership and will continue to educate and urge members of Congress to support this legislation.”
High Tech Investors Alliance (HTIA): “We commend Chairman Issa and Representatives Fitzgerald and Collins for their steadfast leadership in defending American businesses against the exploitation of our courts by foreign adversaries and unscrupulous hedge funds. For too long, a lack of transparency has allowed shell entities to manipulate the legal system to prey on American employers, concealing their predatory practices and identities of their financial backers. As President Trump takes bold action against aggressive economic maneuvers by China and other countries, Congress must also act decisively to protect our judges and juries from becoming tools in the economic warfare waged by antagonists.”
US-MADE: “We already know that America’s foreign adversaries are investing in lawsuits targeting critical U.S. industries,” said US-MADE Executive Director David Crane. “However, we still don’t know the full scale of this problem because only a few jurisdictions require plaintiffs to disclose who is bankrolling their litigation. This is a commonsense bill that will shine light on state owned entities, sovereign wealth funds and other foreign interests targeting critical US industries through investor funded lawsuits. If we want to grow jobs and expand domestic manufacturing, we need greater transparency to expose exactly who is pulling the strings on litigation targeting our most critical domestic industries.”
American Trucking Associations (ATA): “Trucking is essential to our economy, delivering the items Americans need every day and supporting quality jobs. When the plaintiffs’ bar perverts civil litigation into a casino game of ‘jackpot justice,’ the costs are borne by everyone—not just trucking companies, but consumers too in the form of higher insurance rates and higher prices for goods. The secretive nature of these predatory loans can even surprise plaintiffs when they learn they must pay back the lenders at usurious rates,” said American Trucking Associations Senior Vice President of Legislative Affairs Henry Hanscom. “We commend Congressman Issa for leading this effort to shine a light on third-party financiers seeking to exploit the judicial system to make a quick buck. This reasonable reform would protect hardworking truck drivers and ensure justice and fairness drive accident litigation outcomes, not profits.”
Reinsurance Association of America (RAA): “At the expense of small businesses, manufacturers, and American families, foreign and domestic investors are partnering with law firms to profit from U.S. litigation. The Reinsurance Association of America commends Chairman Issa for his leadership and introducing this legislation to fully expose this abuse and restore integrity to the U.S. legal system. The RAA supports this commonsense legislation and urges Congress to quickly pass it.”
Software Information Industry Association (SIIA) President, Christopher Mohr: “For too many years, abusive patent litigation brought by non-practicing entities or ‘patent trolls’ has hurt the U.S. economy by raising costs on consumers, driving small and medium sized enterprises out of business, and depressing innovation in the information and technology industries. It is estimated that more than 80% of all patent suits are brought by patent trolls, often funded by undisclosed third-party beneficiaries. We applaud Chairman Issa and Representative Fitzgerald for seeking to bring pressure to bear on this shadowy industry through the Litigation Transparency Act of 2025. We encourage Congress to join in supporting this legislation.”
Uber: “We applaud Rep. Issa and co-sponsors for reintroducing the Litigation Transparency Act. This much-needed legislation will bring overdue reforms to a murky system of third-party funding that has contributed to excessive lawsuit abuse and higher costs for American consumers.”
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