Legislation to Curtail Third-Party Litigation Funding Advances

By: Raaed Haddad
November 20, 2025

This week, the House Committee on the Judiciary marked up and passed important legislation—the “Protecting Our Courts from Foreign Manipulation Act,” H.R. 2675—to address the sophisticated and costly practice of third-party litigation funding (TPLF). The bill now awaits action in the U.S. House of Representatives.

TPLF is a practice that allows outside investors, including foreign governments, to secretly finance lawsuits for profit. TPLF often targets vulnerable litigants with promises of quick cash. Yet, many end up with little or no financial recovery after fees and funder payouts.

Specifically, H.R. 2675 would ban foreign governments and sovereign wealth funds from engaging in TPLF and increase oversight of foreign involvement. In the current system, foreign adversaries like China can exploit the secrecy currently surrounding third-party funding to weaponize the court system and extract intellectual property from U.S. companies and evade sanctions.

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This legislation will protect consumers and businesses from rising litigation costs, preserve the integrity of the U.S. judicial system, and guard against foreign interference.

The Big “I,” along with a strong, diverse coalition of stakeholders, strongly supports reforms to require disclosure of TPLF to all parties and the courts. This coalition has had numerous discussions with members of Congress and their staff, expressing concerns over TPLF.

Meanwhile, a new survey of consumers released by the Big “I” this week revealed growing concern that excessive and abusive litigation is driving up costs for consumers and reforms are needed.

According to the survey, 64.3% of respondents said they were concerned about how excessive lawsuits increase their premiums, and 80.5% believe that the legal system is used in ways that unfairly drive up insurance costs. Overwhelmingly, 8 in 10 (80.3%) respondents also believed that their premiums would increase due to excessive lawsuits, even if they had never filed a claim themselves.

The Big “I” will continue to advocate for legal system reform, particularly more transparency from those funding litigation, while advocating for independent insurance agents. Look out for updates in the News & Views e-newsletter.

Raaed Haddad is Big “I” director of federal government affairs.