On February 11, Senators Grassley, Tillis, Kennedy, and Cornyn re-introduced the Litigation Funding Transparency Act of 2026. It is the fourth try. It is also the first time the introduction has coincided with record commitment volumes from Burford, Longford, and Parabellum. For a defendant, the absence of funder visibility is a hole in the loss-reserving model.
On February 11, 2026, Senators Chuck Grassley, Thom Tillis, John Kennedy, and John Cornyn walked the Litigation Funding Transparency Act of 2026 onto the Senate floor and asked the chamber a question that defense counsel have been asking in chambers for years. Who is the second name on the other side of the caption. Not the plaintiff. Not the firm. The capital.
The bill would require disclosure of any third-party funder financing a civil action in federal court or a class action, including the funder's identity and the funding agreement itself. It is the fourth time the same coalition has introduced a version of this bill. It is also the first time the introduction has landed inside a calendar quarter where Burford Capital, Longford Capital, and Parabellum Capital have each separately signaled record commitment volumes in their most recent investor communications.
A casualty defense lawyer in Tampa knows the rhythm. A complaint lands. A reservation-of-rights goes out. A mediator gets booked. Somewhere in the spread between the demand and the policy limits sits a number nobody on the defense table has seen, because nobody on the defense table is allowed to see it. That number is the funder's expected return, and it shapes everything the plaintiff will and will not accept.
Burford Capital's most recent investor disclosures describe a portfolio measured in the billions of committed capital across hundreds of matters. Longford and Parabellum operate at smaller but still institutional scale. None of these funders sit at the mediation. None appear on a Rule 7.1 disclosure. None are deposed. Yet each carries an economic interest that can exceed the named plaintiff's, and a contractual right to influence settlement timing that varies by agreement.
For a defendant, the absence of funder visibility is not a procedural oddity. It is a hole in the loss-reserving model. An insurer setting reserves on a commercial liability claim is pricing a settlement distribution against an opposing party whose floor it cannot see. The floor is set by the funder's hurdle rate, not the plaintiff's tolerance for trial.
The federal bill exists because the state map is uneven. Wisconsin in 2018 became the first state to require automatic disclosure of third-party funding agreements in state court litigation. West Virginia and Indiana followed with consumer-protection statutes aimed at funder conduct rather than disclosure. Montana enacted a 2023 statute requiring written disclosure in any civil action. New Jersey's federal district imposed a standing order in District Court requiring disclosure of any non-party funder. Several other federal districts followed with case-by-case orders rather than standing rules.
The result is a system where the same commercial dispute, filed in two different forums, produces two different visibility profiles. A defendant litigating in Wisconsin sees the agreement. The same defendant litigating the same dispute in a non-disclosure jurisdiction sees nothing.
The US Chamber Institute for Legal Reform argued in a March 23, 2026 publication that the patchwork is the problem. ILR's position is that federal Rule 26 should be amended to require automatic disclosure of any non-party funding agreement in federal civil litigation, mirroring the existing disclosure obligation for insurance agreements. The proposal treats funders and insurers as economically equivalent participants in the dispute and treats their non-disclosure as a courtroom asymmetry that the Federal Rules already address on the insurance side.
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The Advisory Committee on Civil Rules has considered TPLF disclosure since 2014. It has declined to act. The bill is in part an effort to route around that institutional reticence.
The economic consequence runs through claims departments before it reaches courtrooms. Without funder visibility, claims handlers cannot reliably distinguish a plaintiff under economic pressure to accept a discounted settlement from a plaintiff backed by a funder whose return profile requires holding out for verdict. The two postures produce different reserve numbers and different reinsurance treaty experience. They also produce different signal in the actuarial back-end where social-inflation factors are calibrated.
The Swiss Re sigma series and other reinsurance research have repeatedly flagged third-party funding as an accelerant of nuclear-verdict frequency in commercial auto and product liability. Whether that flag is causal or correlational is contested. What is not contested is that funders price for outsized awards and that their portfolio economics depend on the tail of the verdict distribution holding up.
An insurer setting reserves on a commercial liability claim is pricing a settlement distribution against an opposing party whose floor it cannot see.
For a primary insurer, that means reserve assumptions calibrated against a verdict distribution shaped in part by a counterparty the insurer cannot identify. For a commercial policyholder facing a funded claim, it means a settlement window narrower than the underlying merits suggest.
Three signals are worth tracking. The first is whether the Senate Judiciary Committee schedules a markup of the Litigation Funding Transparency Act before the August recess. The bill has died in committee three times. The fourth introduction is the first to coincide with active state-level activity in Florida and Texas.
The second is whether the Advisory Committee on Civil Rules opens a new TPLF docket at its June 2026 meeting. A federal rule amendment moves the needle further than a statute, because it binds every federal district without further legislative action.
The third is the next earnings cycle from Burford. Funder disclosures of capital deployment by U.S. court are the closest read available on where the next wave of funded litigation will land.
The question on the caption is not new. The question is whether the caption will say so.
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