Reform Bill Protects Michigan Businesses from Hidden Litigation Funding

Michigan Lawmakers Advance Litigation Funding Reform

The Michigan House Judiciary Committee has approved House Bill 5281, taking a major step toward more transparency and fairness in the legal system.

What the Bill Does:

• Requires registration and disclosure of third-party litigation funders (TPLF).
• Bans foreign adversaries from financing lawsuits in Michigan.
• Caps funder earnings to limit profit-taking from lawsuits.
• Prohibits funders from influencing legal strategies or case outcomes.

Why This Matters to Michigan Businesses:

• Levels the playing field. Keeps lawsuits focused on real claims, not on who stands to make money from them.
• Protects your company’s reputation and resources. Reduces risk of inflated or investor-driven litigation.
• Strengthens state security. Keeps foreign interests out of Michigan’s courts.
• Increases transparency. Makes it easier to identify who’s truly backing a lawsuit.
• Aligns with public opinion. 69% of voters support TPLF disclosure, and 82% support banning foreign participation.

The Bigger Picture:
Third-party litigation funding is a $15.2 billion industry influencing nearly 30% of U.S. infringement cases. While Michigan’s federal courts require funder disclosure, state courts still do not. HB 5281 fills that gap.

What’s Next:
The bill now moves to the full Michigan House for consideration. Stay tuned.

At Koppinger & Associates, we’re committed to keeping you informed on the latest developments that impact your business, the insurance industry, and Michigan’s economic landscape.

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