APCIA: House Judiciary Committee Must Pass Litigation Funding Disclosure Reforms

The American Property Casualty Insurance Association (APCIA) continues to throw support behind two bills schedule for markup today by the House Judiciary Committee.

Committee member Rep. Darell Issa, R-Calif., in February introduced the Litigation Transparency Act of 2025 (HR 1109) that would require disclosure of third-party litigation funding (TPLF) in federal civil cases. Also, the Protecting Our Courts from Foreign Manipulation Act of 2025 (HR 2675) was introduced in April by Rep. Ben Cline, R-Va. It would require disclosure of TPLF by foreign persons and prohibit foreign governments and sovereign wealth funds from investing in federal court litigation.

During a hearing early this year, Issa said the Chinese Communist Party is “waging what they call legal warfare, using the U.S. courts,” eclipsing cyber and spying threats the U.S. faces from China.

Related: Court Orders Start to Expose ‘Startling’ Data on Litigation Funding Sources

Sam Whitfield, APCIA’s senior vice president for federal government relations and political engagement, said the measures “will provide needed transparency for one of the largest cost drivers of insurance premiums – third party litigation funding.

“The House Judiciary Committee must pass these commonsense pieces of legislation that will bring accountability to shadow groups who treat the court room as an investment product, instead of an impartial justice system,” he added.

The Perryman Group in a report this year found that the excessive burden to the U.S. tort system is nearly $368 billion annually, with ripple effects felt in the U.S. economy and costs absorbed by consumers. The economic consulting firm said excess torts lead to inflation costs that trickle down to households that spend an extra $2,437 per year. Prescriptions and home and auto insurance costs are some items affected most.

The insurance industry has routinely blamed litigation funding—investments in lawsuits in exchange for a percentage of a settlement or judgment—for the rapid increase in litigation costs. The insurance industry has lobbied to rein in the practice, and looked at tax reform as a potential opportunity this year. At one point, the One Big Beautiful Bill contained language to make changes to the taxes third-party litigation funders pay, but the Senate parliamentarian ruled the proposed tax increases for profits connected to TPLF violated certain budget rules. The language was removed from the mammoth bill.

Related: Tax Increase on Litigation Funders Does Not Make Final Budget Bill

Topics Lawsuits Mergers & Acquisitions