New Report Reveals Third Party Litigation Funders Control Litigation

WASHINGTON - The American Property Casualty Insurance Association (APCIA) released the following statement in support of the Lawyers for Civil Justice findings that third party litigation funding (TPLF) contracts contain provisions that give funders the authority to control litigation despite funders' contrary claims. The Lawyers for Civil Justice submitted a comment letter to the Advisory Committee on Civil Rules of the United States Courts. The following statement may be attributed to Sam Whitfield, APCIA's senior vice president of federal government relations.

"The recent comment letter from the Lawyers for Civil Justice raises serious and well-documented concerns about TPLF and the extent of control exercised by TPLF funders over the cases they finance. While the funders have consistently represented themselves as passive investors, the contractual provisions in the funding agreements analyzed by Lawyers for Civil Justice tell a distinctly different story."

The Lawyers for Civil Justice's review of funding agreements from some of the largest global funders reveals explicit mechanisms granting funders:

• Case Management Authority - Provisions allowing funders to select and control counsel, and in some cases prohibiting plaintiffs from changing attorneys without funder consent.

• Settlement Controls - Clauses requiring funder approval before any settlement can be accepted, effectively giving funders veto power over resolution of the dispute.

• Continuation of Litigation Without Plaintiff Consent ("Zombie Litigation") - Terms enabling funders to continue litigation even after the plaintiff wishes to withdraw, or to compel plaintiffs to proceed under the funder's direction.

TPLF is growing rapidly, Westfleet Advisors, a litigation finance advisory firm, reports there were $2.3 billion in new financing agreements for 2024 and the total assets under management for TPLF investments have grown to $16.1 billion.

"TPLF is a dangerous practice that takes advantage of injured parties and turns our courts into money-making machines for unknown third parties. Policymakers need a better understanding of TPLF, who is funding it, how it affects consumers, and what is the impact on the U.S. civil justice system.

"APCIA encourages support for Congressman Ben Cline's The Protecting Our Courts from Foreign Manipulation Act (H.R. 2675), which would require disclosure of TPLF by foreign persons and prohibit foreign governments and sovereign wealth funds from investing in TPLF. APCIA also encourages support for Congressman Darrell Issa's The Litigation Transparency Act of 2025 (H.R. 1109), which would require disclosure of TPLF in all federal civil litigation."

The Lawyers for Civil Justice Comment Letter to the Advisory Committee on Civil Rules and its TPLF Subcommittee is available, here and their press release can be found here .