Civil courts check the powerful. This Republican wants them weaker.
A new bill before Congress claims it will curb lawsuit abuse. It won’t. In reality, it will limit ordinary Americans’ access to civil courts.
The Protect Third Party Litigation Funding from Abuse Act, sponsored by Rep. Darrell Issa (R-Calif.), would force plaintiffs in “any civil action” to disclose “the identity of any person (other than counsel of record) that has a legal right to receive any payment or thing of value” from the case.
Third-party funding is not clogging courts. It expands access to justice.
Plaintiffs would need to provide that information to defendants and the court. Anyone with a functioning brain can see what will happen next: The names leak, activists and corporate PR shops pick targets, and the people financing the lawsuit get punished for it.
If that sounds like a blackmail scheme, it is. And it would be perfectly legal.
Third-party litigation funding works like this: An individual, company, or organization advances money to a plaintiff or law firm to cover the costs of a lawsuit. In exchange, the funder receives a share of any judgment or settlement. If the plaintiff loses, the funder gets nothing.
The arrangement exists for a reason. Lawsuits can be expensive. Complex cases require investigators, expert witnesses, depositions, document review, and months or years of legal work. Deep-pocketed defendants know they can bury a plaintiff under delays, discovery fights, and endless motions while the meter runs at hundreds (sometimes thousands) of dollars an hour.
Litigation funding helps level that field. It gives plaintiffs a fighting chance against defendants who can afford to grind them down.
Issa calls this “abuse” because hedge funds and speculators sometimes fund cases in hopes of a return. “We believe that if a third-party investor is financing a lawsuit in federal court, it should be disclosed rather than hidden from the world,” Issa said when he announced the bill.
That sounds reasonable only if you ignore what trials are for.
A civil trial asks three questions: Did the defendant do what the plaintiff alleges? Did the defendant’s actions cause harm? If so, what were the damages (if any)? The identity of a funder does not help a jury answer any of them. If anything, it distracts from the merits and invites a side show: the defendant arguing the plaintiff is a puppet and the case is illegitimate because someone with money helped pay the bills. That argument deserves no special protection.
What counts is what the defendant did or didn’t do and whether it hurt the plaintiff. Who finances the plaintiff’s lawyers doesn’t change the facts of the case.
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A successful plaintiff also has the right to spend an award as he or she chooses, including paying debts and obligations incurred to bring the case. Issa’s bill would chill that option by scaring off funders through forced disclosure. The bill doesn’t touch defendants, who can hire every white-shoe law firm on the planet. It targets the side that usually needs help.
Issa’s bill also pretends it’s solving a crisis that doesn’t exist. The number of lawsuits filed each year in the United States, at both state and federal levels, has fallen by roughly one-third since 2012, according to Consumer Shield. Meanwhile fewer than 1% of state civil cases go to trial, and fewer than 2% of federal civil cases do. Most settle or get dismissed. Third-party funding is not clogging courts. It expands access to justice.
The bill also reaches far beyond any plausible federal interest. Federal cases account for only about 1.4% of civil litigation nationwide. States already have authority to regulate litigation funding — and some have. As of July 2025, seven states — Indiana, Kansas, Louisiana, Montana, Oklahoma, West Virginia, and Wisconsin — had regulations governing litigation funding, according to the Washington Legal Foundation. The fact that most states haven’t bothered tells you what lawmakers think: This isn’t a pressing problem.
The broader claim — that litigation funding drives frivolous suits — fails under scrutiny. A 2022 report from the U.S. Government Accountability Office found funders vet cases carefully and avoid interfering in litigation. They do that for a simple reason: They get paid only if the claim succeeds. The report put it plainly: “Funders select the most meritorious cases to fund because they only receive returns when claims are successful.”
Economic reality imposes its own discipline. Third-party funding does not “abuse” the system. It democratizes access to it.
Issa’s bill would do the opposite. By threatening people who finance lawsuits, it would tilt the playing field further toward big corporations and the ultra-wealthy — the parties most able to outspend and outlast everyone else.
Like it or not, civil suits help keep a free society free. They allow ordinary people to hold powerful actors accountable for harm. Restricting access to courts doesn’t stop abuse. It increases it — by giving the powerful more insulation from consequences. That’s the kind of “reform” Americans don’t need.
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