Third-Party Litigation Funding bill failed in U.S. Congress — and “foreign abuse” turned out to be nothing but pretextual

Context: In the United States, third-party litigation funding is under attack on multiple fronts.

• The greatest threat ever to litigation finance was an attempt to impose a punitive tax on litigation funding in the United States. Sen. Thom Tillis (R-N.C.) tried to hijack a wide-ranging legislative initiative (“One Big Beautiful Bill”) for this purpose, but the related passage was cut out (July 1, 2025 ip fray article).
• More and more federal judges allow discovery into litigation funding. On Friday we pointed to a laudable contribution by Certum Group: a model brief for opposing discovery into litigation funding (January 16, 2026 ip fray article).
• Rep. Darrell Issa (R-CA) wanted to make litigation finance-related disclosures mandatory, obviously in hopes of a chilling effect (for example, because of the impact on juries) and pandering to Big Tech. It started with his Litigation Funding Transparency Act of 2021 (prior to which there had been another initiative by other members of Congress going back to the 2017-2018 term), which was narrower than subsequent proposals. On Tuesday (January 13, 2026), the House Judiciary Committee debated Rep. Issa’s Protecting TPLF [Third-Party Litigation Funding] From Abuse Act, and it was reported by different media that the bill was pulled after about an hour of debate without stating the reasons and explaining the exact dynamics. It became known on Tuesday that the assumption was the bill would not get enough votes in the House, much less 60 votes in the Senate, given bipartisan concerns. When it will be debated again is unclear.