Protecting TPLF From Abuse Act

Bill Summary: Protecting TPLF From Abuse Act (H.R. 7015)

Overview

The Protecting Third Party Litigation Funding From Abuse Act (H.R. 7015) is designed to increase transparency and oversight regarding third-party litigation funding (TPLF) in U.S. federal civil courts. The bill requires parties in civil lawsuits to disclose when an outside entity—which is not a party to the case or the legal counsel—has a legal right to receive a portion of the financial outcome of the litigation.

Key Provisions

Mandatory Disclosures

The bill amends Title 28 of the U.S. Code to mandate that a party or their counsel of record provide written disclosure to the court and all other named parties regarding:
* Identity of Beneficiaries: The identity of any person or entity entitled to receive any payment or "thing of value" contingent upon the outcome of the case (e.g., settlements, judgments, or attorney's fee awards).
* Agreement Production: Parties must provide the actual funding agreements to the court for in camera (private) review. Following this review, the documents must be shared with other parties, subject to court-ordered protective orders or privileges (such as attorney-client privilege).

Exceptions and Limitations

To avoid over-regulation of standard financial arrangements, the disclosure requirements do not apply if the legal right to payment is solely for:
* The repayment of the principal of a loan.
* Interest on a loan, provided it does not exceed 10% or three times the annual average 30-year constant maturity Treasury yield.
* Reimbursement of attorney’s fees paid to the legal counsel.
* Reimbursement of a grant.

Additionally, the bill protects the privacy of donors, members, and associates of the funding entity. Their identities generally do not need to be disclosed unless they themselves have a legal right to receive payments from the case outcome.

Timeline and Compliance

• Timing: Disclosures must be made by the latest of: 10 days after the funding agreement is signed, the time of initial disclosures under Federal Rule of Civil Procedure 26(a)(1), or a deadline set by the court.
• Duty to Correct: Parties have a continuing obligation to supplement or correct disclosures if they become incomplete or incorrect.

Who is Affected?

• Litigants: Parties in federal civil actions who utilize outside funding to pursue their claims.
• Legal Counsel: Attorneys who must manage these disclosures as part of the litigation process.
• Third-Party Funders: Investment firms or individuals who provide capital to litigants in exchange for a share of the recovery.
• The Judiciary: Federal courts, which will now be responsible for reviewing funding agreements and managing related protective orders.

Procedural Impact and Scope

• Applicability: This Act applies to all civil actions that are either currently pending or commenced after the date the bill is signed into law.
• Admissibility: The bill clarifies that the fact that a disclosure was made under this Act does not automatically make that information admissible as evidence in court, nor does it change general discovery rules.

Current Status

As of January 12, 2026, the bill has been introduced in the House of Representatives and referred to the House Committee on the Judiciary.