The Litigation Finance Fight Didn't End in 2025. It Regrouped.
When the Senate parliamentarian struck down the proposed 40.8% tax on litigation finance profits last July, a lot of people in the plaintiff bar exhaled. The provision was gone. The immediate threat was over.
What did not go away was the coalition behind it.
Major insurance carriers including Nationwide, Liberty Mutual, and Sentry had actively lobbied for the Tillis provision. After it was removed from the One Big Beautiful Bill, the CEOs of Chubb and Marsh & McLennan publicly pledged to keep fighting. That is not the posture of an industry that considers the matter closed. That is an industry that lost a round and is already planning the next one.
Two developments since then are worth paying attention to.
Federal disclosure rules are moving. A judiciary advisory committee recently voted to move forward drafting mandatory disclosure obligations for third-party litigation funders, advancing what has become one of the most watched rulemaking efforts in civil procedure in years. The proposal would require parties to disclose the existence of funding agreements, the identity of funders, and the nature of their financial interest. The specifics are still being worked out, but the direction is clear.
State-level regulation is accelerating. Several states passed new disclosure and oversight laws in 2025, and more are in progress. The patchwork is getting more complex, and the compliance burden for firms operating across multiple jurisdictions is growing.
None of this is reason for alarm. But it is reason to pay attention to how funding arrangements are structured, documented, and disclosed. Firms that have built litigation finance into their capital strategy need to understand that the rules governing that capital are not settled.
This is an area we watch closely, because it directly affects the firms we work with. If you have questions about how these developments might affect your funding strategy or case economics, we are happy to get into the specifics.
Read more on this topic: 2026 Marks 'Turning Point' in War Against Litigation Financing via Insurance Business
Mirena and Company works with plaintiff law firms on litigation funding, settlement planning, law firm consulting, and QSF services.
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