Republicans in Congress have targeted the multibillion-dollar litigation funding industry with proposed new taxes and accusations of foreign interference in U.S. energy and technology markets.
The biggest threat currently facing third-party litigation funding, or TPLF, is a provision in the Senate version of President Trump’s One Big Beautiful Bill that would more than double the taxes on TPLF proceeds. Litigation funders provide money to pay lawyers and experts in hopes of reaping a percentage of any winnings.
Right now, those payouts are treated as capital gains with a maximum 20% rate. The proposed change would raise that to 41% and include foreign investors and sovereign wealth funds now largely exempt from U.S. taxes.
Shares in Burford Capital, the world’s largest TPLF firm, plunged 14% on June 17 after news broke that the Senate had added the tax to the budget reconciliation bill, incorporating a proposal originally launched by Sen. Thom Tillis in May as the Tackling Predatory Litigation Funding Act.
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Author: Faith Novak
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