Third party litigation funding (TPLF) is a multibillion-dollar, global industry that allows hedge funds and other outside financiers to invest in a lawsuit in exchange for a cut of any settlement or award. Many times, no one—not the plaintiffs, defendants, or even the judge overseeing the lawsuit—knows if an outsider has a financial stake in the case’s outcome because there are no disclosure requirements. The lack of transparency over who is funding lawsuits has troubling ramifications for the U.S.
A new national survey released by the U.S. Chamber of Commerce Institute for Legal Reform shows that 69 percent of voters, including strong majorities of Republicans, Democrats, and Independents, support requiring the disclosure of TPLF.
The survey also shows that 82 percent of voters across the political spectrum oppose allowing foreign governments to invest in U.S. lawsuits against American companies. A recent ILR report, ILR Briefly: A New Threat: The National Security Risk of Third Party Litigation Funding, found:
- There is a growing concern that a large volume of foreign-sourced money may be pouring into U.S. civil litigation against U.S. companies and industries (including those in defense and other highly sensitive sectors).
- A foreign government could fund litigation to advance its strategic interests against the U.S.
- Though the U.S. government has taken action to limit foreign access to U.S. technology, there is no measure currently in place to prevent foreign adversaries from using TPLF to circumvent existing safeguards.
Interested in learning more about the secretive world of TPLF? Visit ILR’s website for more, or watch the panel discussion about the national security ramifications of TPLF from ILR’s Summit 2022: Law, Policy & Politics.View PDF