Litigation Transparency Act of 2025
Summary
The Litigation Transparency Act of 2025 would require disclosure of third-party litigation funding (TPLF) in federal civil cases. TPLF is a multi-billion-dollar industry where hedge funds, sovereign wealth funds, foreign entities and other financiers invest in lawsuits in exchange for a share of the settlement or award. Under the bill, parties or their lawyers would need to disclose in writing to the court and all other parties the identity of any person that has a right to receive payment based on the outcome of the case, and would need to produce any agreement creating such a right for inspection and copying. Supporters argue that lack of transparency in litigation funding allows funders to exert undue influence over litigation strategies and settlements, sometimes without plaintiffs even knowing their lawyer has entered into a funding agreement, and that secrecy allows for increased speculative litigation and creates opportunities for foreign entities to exploit the U.S. legal system. However, opponents contend that the broad disclosure requirements threaten freedom of speech and association by compelling parties to reveal detailed information about their financial support, and would force public disclosure of donor identities. The bill is currently under consideration by the House Judiciary Committee.