LANSING, Mich. — State Representative Mike Harris has introduced House Bill 5281, a reform plan that strengthens transparency in Michigan’s civil justice system and prevents hidden outside interests, including foreign governments, from financing lawsuits in the state.

The proposal is supported by a broad grassroots coalition working through the Michigan Alliance for Legal Reform, a partnership of consumer advocates, small-business groups, and community leaders. The Alliance has raised concerns that undisclosed third-party litigation financing is driving up costs for families and job providers, encouraging frivolous lawsuits, and creating opportunities for foreign adversaries to influence American litigation.

Third-party litigation funding allows an outside interest to finance another party’s lawsuit in exchange for a portion of any settlement or judgment. Nationally, this industry has grown into a fifteen-billion-dollar market and is involved in an estimated thirty percent of infringement cases in the United States. In Michigan, the practice operates with almost no disclosure requirements in state courts.

“Right now, an outside interest, including a foreign entity, can fund a Michigan lawsuit without the judge, the jury, or even the plaintiff knowing who is involved,” Representative Harris said. “This lack of transparency threatens fairness in our legal system and creates opportunities for foreign governments to influence litigation inside our borders. We cannot allow Michigan’s courts to be used in that way.”

House Bill 5281 establishes several reforms that increase clarity and accountability within the system:
• Required disclosure of any third-party funding agreement to the court and all litigants.
• Registration requirements for litigation financiers operating in Michigan.
• A prohibition on funding from foreign countries of concern, preventing foreign actors from accessing sensitive information or using Michigan’s courts to target American industries.
• Limits on funder profit so that plaintiffs receive the compensation intended for them.

According to the Alliance, the absence of clear rules allows anonymous funders to shape case strategy, prolong litigation to increase investor returns, and in some situations capture the full value of a settlement intended for the plaintiff. Harris noted that these costs ultimately fall on households through higher prices, higher insurance premiums, and broader economic impacts.

“This legislation does not limit access to justice,” Harris said. “It ensures that justice is not shaped by undisclosed financial interests. Michigan residents deserve a legal system that is open, fair, and free from outside manipulation.”

Public polling shows broad bipartisan support for these reforms, including high support for disclosure requirements and prohibitions on foreign-government involvement in litigation financing.

House Bill 5281 has been referred to the House Judiciary Committee for further consideration.

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Media Contact: Dakota Gordon, 615-838-1063, DGordon@house.mi.gov