Class action and mass tort litigation sit at the center of the current U.S. regulatory fight over litigation finance. As of mid-2026, eight states, Georgia, Indiana, Kansas, Louisiana, Montana, Oklahoma, West Virginia, and Wisconsin, had enacted specific regulations governing litigation funding, with Georgia's 2025 law (effective January 1, 2026) notable for requiring funders to register with the state's Department of Banking and Finance and exposing them to joint and several liability in frivolous litigation, alongside Montana's earlier combination of enumerated prohibited terms, automatic disclosure requirements, and caps on the percentage of recovery a funder may take.
At the federal level, the clearest current vehicle is the Litigation Funding Transparency Act of 2026 (S. 3826), introduced February 11, 2026 by Senators Chuck Grassley, Thom Tillis, John Kennedy, and John Cornyn. It would require disclosure of third-party funding agreements in federal class actions and multidistrict litigation involving 100 or more cases, bar funders from controlling litigation strategy or settlement decisions, and pay particular attention to foreign-sourced funding, reflecting rising congressional concern about foreign sovereign entities and foreign-controlled enterprises financing U.S. litigation. A companion House bill, the Litigation Transparency Act of 2025 (H.R. 1109), covers federal civil litigation more broadly. Neither had passed as of mid-2026, but both reflect a sustained, defense-side-backed push to bring funding arrangements into the open in exactly the case types, class actions and mass torts, where funding volumes and public attention are both highest.
Proponents of funding argue disclosure requirements are being used as a proxy fight to weaken funding altogether rather than a genuine transparency measure, since revealing a funder's identity and terms to opposing counsel can hand the defense strategic information with little corresponding benefit to the litigation's fairness; opponents argue that a nonparty with a financial stake in the outcome of representative litigation affecting absent class members is precisely the situation where disclosure is most warranted.