Reading Lifting the Shadows (October 2025) and Justice for Growth (September 2025)

By Nick Rowles-Davies

Between 29 September and 14 October 2025, the US Chamber of Commerce’s Institute for Legal Reform (ILR) published two pieces aimed at the same target on different continents. Justice for Growth urged the European Commission to use its competitiveness reform package as the vehicle for EU-wide regulation of third-party funding. Lifting the Shadows restated the ILR’s domestic case for federal disclosure, state-level funder accountability measures and foreign funding restrictions in US courts. Read together, the pieces describe the shape of the Chamber’s campaign more clearly than either does alone. One of those fronts has since closed, a point I return to below.

Both briefs are short and rhetorical rather than empirical. Both lean on a small set of recurring examples. Both arrive at the same destination, which is that institutional capital in plaintiff-side commercial litigation should be made more expensive, more visible and, in some categories, prohibited. Neither piece engages with the structural reasons litigation funding exists. Neither acknowledges the practical effects of the proposed regimes on the meritorious claims they would also catch.

The argument restated

Lifting the Shadows organises itself around three categories of concern. Funders take control of cases, exemplified by the Sysco and Burford dispute over the US pork and beef antitrust litigation. Funders enable foreign influence in US courts, exemplified by sanctioned Russian capital traced to A1 and the Alfa Group and by PurpleVine’s involvement in Delaware patent litigation. Funders extract disproportionate returns at the expense of vulnerable plaintiffs, exemplified by an Australian Aboriginal stolen-wages class action in which funder recoveries exceeded individual claimant payouts by orders of magnitude. The piece concludes with a survey of 2025 state-level enactments and pending federal bills, including H.R. 1109 (Litigation Transparency Act) and H.R. 2675 (Protecting our Courts from Foreign Manipulation Act). ¹

Justice for Growth takes the same arguments to Brussels. It positions third-party funding regulation as part of Commissioner McGrath’s Justice for Growth initiative, calling for EU-wide disclosure and oversight. It cites the same Sysco example and the same figure of $529 billion, or $4,207 per household, drawn from the ILR’s own Tort Costs in America methodology. It identifies the International Legal Finance Association’s Brussels lobbying as the principal obstacle. ^{2, 6}

The Sysco point, in context

Both briefs lead with Sysco and Burford. The actual record is narrower than the briefs imply. Sysco, a sophisticated Fortune 100 corporate plaintiff with its own counsel, entered into a portfolio funding agreement with Burford Capital under which Burford had negotiated consent rights over settlement. A dispute then arose in 2023 over Sysco’s attempted settlements in the antitrust matters, which spanned the pork, beef and broiler chicken price-fixing claims.

The agreement was litigated, and Sysco ultimately transferred its claims to Burford’s vehicle, Carina Ventures, which has sought to be substituted as plaintiff and continue the prosecution. That substitution has itself proved contentious, with courts dividing over whether a funder may displace the original plaintiff. In February 2026 the Seventh Circuit addressed the question in the broiler chicken matter, in proceedings concerning a $50 million settlement Sysco had reached, while other courts have required Sysco to remain the named plaintiff in the pork and beef claims. ⁴

That sequence reflects a contractual disagreement between two commercial parties about the operation of a clause that both had agreed. It shows a litigated contract dispute between commercial parties, not an industry pattern of funders dictating litigation strategy over the heads of plaintiffs. Mainstream commercial funding agreements generally distinguish consultation and consent mechanics from day-to-day litigation control. Where consent rights exist they are negotiated and disclosed to the funded party. One contractual dispute, litigated and still working through the courts, is being asked to carry a conclusion the underlying record does not deliver.

Foreign influence, in proportion

The foreign-influence concern is more serious, and also more straightforward to address. The examples ILR cites raise real categories of concern: sanctioned Russian-linked capital through A1, China-linked IP funding through PurpleVine and Australian-funded environmental litigation against ExxonMobil. Each category is already addressable under existing federal authority.

Existing judge-specific and district-level disclosure mechanisms already reach aspects of non-party funding: Chief Judge Connolly’s Delaware standing order, Northern District of California Civil Local Rule 3-15 and District of New Jersey Local Civil Rule 7.1.1 each provide disclosure routes of differing scope. Federal sanctions enforcement against funders is available under existing Treasury and OFAC authorities. FARA remains available where the statutory agency or foreign-principal criteria are met. The proportionate federal response is H.R. 2675, which targets foreign-state and foreign-government-controlled capital specifically and which cleared the House Judiciary Committee in November 2025. The broader H.R. 1109 would impose blanket disclosure of all funding agreements in federal civil litigation regardless of the funder’s jurisdiction and remains before the same committee. It addresses a problem that H.R. 2675 reaches more directly, while imposing costs across the meritorious portfolio

The “vulnerable plaintiffs” framing

The Australian Aboriginal stolen-wages class action figure is real, and the settlement was approved by the Federal Court of Australia under its statutory framework for class action settlements. Per-claimant recovery reflects the scale of the class and the court-approved settlement structure as much as the funder’s share. The comparison to junk-bond yields also misses the basic point that litigation risk is binary and highly idiosyncratic in a way ordinary credit risk is not. ⁵

The framing also imports consumer-claim assumptions into a market that is not, in the main, a consumer market. Much of the institutional commercial market is portfolio funding for sophisticated corporate plaintiffs, international arbitration, antitrust mass claims and patent enforcement. In those matters the funded party is itself a commercial actor with its own counsel and is in no sense vulnerable. The “vulnerable plaintiff” frame fits a narrow subset of consumer-claim funding and is being used to characterise the market as a whole.

The state legislation

The 2025 state-level enactments cited by ILR (Arizona, Colorado, Kansas, Georgia, Montana, Oklahoma and Tennessee) vary materially in their content. Across those statutes, the most consequential provisions are joint liability or indemnity for adverse costs and sanctions, restrictions on funder control or consent rights and prohibitions on foreign funding from defined countries of concern.

Joint liability without control is the headline problem. A funder that has no contractual right to direct litigation strategy is being made liable for the costs and sanctions consequences of decisions it did not make. The pricing implication is that funders must increase the returns required across the entire portfolio to compensate for losses they cannot influence. That raises the cost of funding marginal meritorious matters while doing little to deter the opportunistic ones. The combination of joint liability with prohibitions on consent rights produces a regulatory shape that prices institutional capital out of the smaller commercial cases where private enforcement most needs it. The pricing-out is the design’s purpose.

Justice for Growth, read carefully

The European framing repays close reading. The Draghi and Letta competitiveness reports cited by ILR are concerned with regulatory simplification, capital markets union and the burden of compliance, not with the volume of plaintiff-side enforcement. The Justice for Growth initiative under Commissioner McGrath addresses civil and corporate law modernisation in support of single market competitiveness.

Effective competition law enforcement, cartel damages recovery, ESG-related private enforcement and post-merger disputes in the EU rely on adequate plaintiff funding. The German Federal Court of Justice’s recent truck cartel ruling, even as it unsettled the economics of mass assignment, illustrates how far collective redress in Europe depends on funded aggregation. EU-wide restrictions on third-party funding, drafted to the Chamber’s preferred shape, would weaken the competition law enforcement mechanism the single market depends on. The competitiveness frame is being inverted to support a regime that would shrink the effective reach of EU civil justice.

Since the brief appeared, that argument has lost its immediate occasion. On 18 November 2025, closing the final meeting of the EU’s High-Level Forum on Justice for Growth, Justice Commissioner Michael McGrath confirmed that the Commission does not plan to bring forward legislation on third-party funding and that it would prioritise monitoring the implementation of the Representative Actions Directive instead. Forum participants, he noted, had seen no need for further regulation. For now the Brussels front the ILR sought to open has closed. The position for which the International Legal Finance Association argued has, for now, prevailed. The episode is worth marking, because it shows the competitiveness argument failing on its own terms. Asked in effect whether new funding restrictions would serve European competitiveness, the Commission’s own forum concluded that they would not. ³

What real reform looks like

There is a legitimate transparency conversation. Targeted disclosure to courts of funder identity and control rights is defensible. So is disclosure tied to sanctions, foreign-principal status and security-sensitive subject matter. So are consistent ALF and ILFA practices on consent rights. The actual record supports a careful regime focused on those identified risks.

The ILR’s two briefs do not propose that regime. They describe a regulatory architecture designed to remove institutional capital from the plaintiff side of commercial enforcement across both jurisdictions. The Chamber represents repeat defendants. Its preferred regulatory outcome is fewer funded claims, brought with less claimant-side capital, against larger and better-resourced defendants. That is a coherent position. It should be argued as what it is rather than as access to justice.

Notes

1. Institute for Legal Reform, “Lifting the Shadows: Restating the Case for Reforming Third-Party Litigation Funding (TPLF)”, 14 October 2025.

2. Institute for Legal Reform, “Justice for Growth: An Opportunity to Address Europe’s Multi-Billion-Euro Lawsuit Funding Industry”, 29 September 2025.

3. “No EU legislation on third-party litigation funding”, Law Society of Ireland Gazette, 25 November 2025, reporting Commissioner Michael McGrath’s statement of 18 November 2025.

4. United States Court of Appeals for the Seventh Circuit, opinion of 5 February 2026 (No. 25-1110), recording Sysco’s assignment of its broiler, beef and pork claims to Carina Ventures LLC; and Reuters, “Litigation funder Burford wins US court challenge over $50 million Sysco settlement”, 6 February 2026 (Burford overturning approval of the Pilgrim’s Pride settlement).

5. Institute for Legal Reform, “How Australian Class Actions Enrich Lawyers and Funders While Victims Are Shortchanged” (workers projected to receive AUS $10,000 to $14,000 while Shine Lawyers and Litigation Lending Services were projected to receive more than AUS $98 million combined); see also ABC Four Corners reporting on the Northern Territory and Western Australia stolen-wages class actions, and the Federal Court of Australia settlement approval materials.

6. Institute for Legal Reform, Tort Costs in America (costs and compensation in the US tort system of $529 billion in 2022, equivalent to $4,207 per household; figure derived from the ILR’s own methodology).