South OC Times

Congressman Darrell Issa and Congressman Scott Fitzgerald have introduced new legislation aimed at reforming third-party financed civil litigation. The proposed bill, known as H.R. 9922 or the Litigation Transparency Act of 2024, mandates the disclosure of parties receiving payment in civil lawsuits.

This legislation addresses the growing concern over undisclosed third-party interests funding civil litigation through entities like hedge funds and sovereign wealth funds operating via shell companies. The bill requires that any investors entitled to receive payment based on a case's outcome be disclosed, along with the financing agreements between these investors and involved parties.

Rep. Issa stated, "Our legislation targets serious and continuing abuses in our litigation system and achieves a level of transparency that people deserve, and our standard of law requires." He emphasized the need for transparency to ensure fair treatment by the justice system and deter exploitation.

Rep. Fitzgerald shared his experience from Wisconsin, where similar disclosure laws were enacted: "As a former state legislator, I helped usher in laws to mandate disclosure of TPLF in Wisconsin courts. This ensured parties were aware of all stakeholders who had a financial interest in the outcome of litigation."

The issue extends beyond legal fairness; it also raises national security concerns. Recent cases have highlighted how China-backed funders have been involved in intellectual property litigation against U.S. companies. These concerns are echoed by several state attorneys general and senators Marco Rubio and John Kennedy.

The bill has garnered support from various organizations:

- National Association of Mutual Insurance Companies expressed concern over frivolous litigation driven by third-party investors.

- The U.S. Chamber of Commerce noted that outside financiers should not secretly direct or profit from funded litigations.

- American Property Casualty Insurance Association mentioned that such practices increase costs for consumers and businesses.

- High Tech Inventors Alliance praised efforts to expose predatory tactics by hedge funds, private equity, and foreign countries.

- US MADE supported the bill as an important step against manipulation of courts for personal gain.

The full text of the bill is available for public access.