Senator John Kennedy of Louisiana has introduced a bill to change the way third-party litigation funding is handled in U.S. courts. The new measure, called the Protecting Our Courts from Foreign Manipulation Act, aims to stop foreign governments and sovereign wealth funds from financing lawsuits in the United States.
The bill comes with strong support from the American Property Casualty Insurance Association (APCIA), a major insurance industry group. Sam Whitfield, APCIA’s senior vice president for federal government relations, said foreign-backed litigation funding poses a serious threat to national security and the economy.
This Senate bill pairs with a similar one in the House, sponsored by Representative Ben Cline from Virginia. That House bill recently moved forward in the House Judiciary Committee, signaling growing momentum in Congress to address the issue.
Under Kennedy’s proposal, anyone funding U.S. litigation would have to make their foreign connections known to both the courts and the Department of Justice. The DOJ’s National Security Division would also be tasked with keeping an eye on foreign involvement in lawsuits and reporting on it regularly.
Senator Kennedy expressed concern that hostile foreign nations might use litigation funding to gain access to U.S. military technology, hurt American companies, or push political goals. “Right now, hostile foreign nations can pour money into our legal system like it’s a slot machine,” he said. His bill aims to close this loophole and protect the justice system from being exploited.
The insurance industry has criticized the rise of litigation funding over the past few years. They argue that outside investments in lawsuits drive up litigation costs, which in turn makes insurance more expensive for everyday consumers.
With both Senate and House bills now moving, APCIA urges Congress to quickly pass these changes to protect consumers and national security. The issue highlights growing concerns about how foreign money can influence American courts and the broader legal landscape.