The pressing need for litigation reform
As the 2024 presidential campaign heats up, America’s adversaries are working overtime to interfere with our democratic system. The Department of Justice and Washington think tanks have recently exposed efforts by China, Iran, and Russia to infiltrate and manipulate both political parties and their nominees. These kinds of foreign interference operations should be totally unacceptable to the American public, and our leaders should seek out ways to block them and punish those responsible.
Sadly, though, malignant foreign influence in American government stretches beyond our elections; it is a major problem facing our courts as well. Through a legal mechanism known as third-party litigation funding, antagonistic regimes can invest in lawsuits against American companies and wage a subtle form of economic warfare against them. This poses a clear ongoing national security threat, and Congress should act rapidly to close loopholes that allow our enemies to weaponize our legal system against us.
From the Middle Ages in England, the principles of common law have historically prohibited non-parties from financially backing litigation. Common law doctrines evolved in this way to specifically preclude frivolous lawsuits. But beginning in Australia during the 1990s, many countries passed statutes abolishing these long-standing customs. These innovators were led by a misguided sense that third-party litigation funding could support individuals and entities with limited resources as they pursued justice in the courts.
Third-party litigation funding took off in the United States in 2010, and it has since become a nearly $14 billion industry, causing a host of problems in the courts. The ability to monetize legal claims and transfer risks to third parties can make plaintiffs reckless and deter settlements that would otherwise be in the best interests of both parties in a given case. It can also weaken the attorney-client privilege that Americans have always believed vital to a functioning legal system.
Read more in Washington Examiner.
