The passage of HB 5281 marks a meaningful step toward bringing accountability to third-party litigation funding — a largely unregulated practice that affects plaintiffs and defendants across the state.
The Michigan Alliance for Legal Reform is applauding the passage of HB 5281, legislation that would establish common-sense guardrails around a judicial financing practice known as third-party litigation funding (TPLF). Under TPLF arrangements, outside investors finance lawsuits in exchange for a portion of any final award or settlement — often without the knowledge of opposing parties or even presiding courts.
Currently, TPLF operates in Michigan with little to no oversight, creating transparency gaps and potential conflicts of interest that can harm both plaintiffs and defendants. HB 5281 directly addresses these concerns — without going so far as to prohibit the practice altogether. The goal is balance: accountability, not prohibition.
Read the Michigan Alliance for Legal Reform’s complete statement on HB 5281.
