New Litigation Finance Group Looks to Beat Back Attacks on Hill

A new litigation finance trade group is joining the fray as the industry prepares for another fight on Capitol Hill.

The American Civil Accountability Alliance announced it will launch Tuesday, led by lawyers Erick Robinson and Charles Silver. The group will focus on lobbying against efforts to clamp down on litigation finance and promoting an “access to justice” message that outside funding for lawsuits helps even the playing field with large corporations.

“The main reason for launching the organization is that it’s needed,” Robinson said. “The true stakeholders need a voice.”

The new trade group comes after a year of increased scrutiny for litigation funders, who narrowly dodged a tax bill that funders say would have crippled the industry in the US. Another legislative battle is brewing in Congress, along with efforts to regulate the outside funding of lawsuits at the state level.

The alliance becomes the second representative of the $16.1 billion litigation funding industry in state legislatures and on Capitol Hill, along with the International Legal Finance Association. The two groups will battle the US Chamber of Commerce and an army of insurance industry lobbyists that have been pushing for regulation.

Erick Robinson

Last year’s tax fight appeared to catch funders off guard and sent the industry into a state of panic. A bill introduced by Sen. Thom Tillis (R-NC) that would have added a 41% tax on litigation finance profits was nearly included in the One Big Beautiful Bill. Funders began regrouping after the measure was nixed by the Senate parliamentarian.

“The Tillis tax was a wake-up call,” Robinson said. “We should not just ignore the fact that there are forces that do place money far above getting justice for ordinary people.”

Robinson is a partner at Cherry Johnson Siegmund James, the Texas firm he joined last year after leaving his role as chair of Brown Rudnick’s patent litigation group. He said he’s used funding in a number of his patent cases—a popular area for funders—but that he was interested in forming the organization because of his concern that legislation could limit access to justice.

Silver is a professor at the University of Texas School of Law, whose research focuses on mass torts, attorneys’ fees and healthcare law.

Critics accuse funders of boosting frivolous lawsuits that drive up costs for insurers and other businesses. Some opponents are also focusing on foreign funding of US lawsuits, arguing that the practice raises national security threats.

Coming Battle

The onslaught of legislation is coming from a variety of directions, though only the Tillis bill has come close to becoming law at the federal level. Rep. Darrell Issa (R-Calif.) last year introduced a measure (H.R. 1109) that would require disclosure of litigation funding agreements, similar to laws passed in a few states in recent years. A separate bill (H.R. 2675) from Rep. Ben Cline (R-Va.), which focuses on foreign funders and is the farthest along, was approved by the House Judiciary Committee in November.

Tillis, who is set to leave Congress at the end of the year, plans to keep pushing for a new version of his tax bill.

“We’re going to go after it,” Tillis said during a Bloomberg Government roundtable in October.

Robinson pans the bills as attempts to muzzle the “little guys” filing lawsuits against large, well funded entities.

“It’s incredibly classist and I would argue anti-American for people to be excluded from using their rights and getting into the courtroom because they don’t have the money to do it,” he said.

ILFA has tried to separate itself from law firm funding in the mass tort space, focusing instead on financiers for commercial disputes. Robinson’s alliance is open to all interested stakeholders, he said, including funders, law firms, litigants, and advisers to litigation funding. The group will recruit members after its launch next week and will eventually hire a DC-based lobbyist, he said.

“In the ordinary course of business I don’t talk for the most part with mass tort lawyers,” Robinson said. “That’s been I think a hindrance and my hope is that we can all at least have a forum where we can express ourselves and then come up with proposed solutions.”