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Litigation finance tax, limits on contempt…
Trials & Litigation
Litigation finance tax, limits on contempt energy dropped from Senate’s model of funds megabill
By Debra Cassens Weiss
July 1, 2025, 9:21 am CDT
Two proposals of concern to many legal professionals are being dropped within the U.S. Senate’s model of a funds megabill, referred to as the One Massive Stunning Invoice Act. (Picture from Shutterstock)
Two proposals of concern to many legal professionals are being dropped within the U.S. Senate’s model of a funds megabill, referred to as the One Massive Stunning Invoice Act.
A proposal that might have taxed earnings from litigation finance contracts at 31.8% can’t be included within the invoice, in keeping with the Senate referee.
Bloomberg Regulation has the story.
“Although lawmakers should still attempt to reinsert the availability, its failure to be included within the invoice can be an enormous reduction for litigation funders,” Bloomberg Regulation studies. “They warned the availability may destroy the rising enterprise of financing litigation, through which capital suppliers pay charges in change for a slice of court docket winnings or settlement proceeds.”
The Senate model of the tax invoice additionally dropped a provision that might have restricted federal courts’ potential to carry authorities officers and different litigants in contempt for disobeying their orders, HuffPost studies.
The supply had stated federal courts can’t use appropriated funds to implement a contempt quotation for failing to adjust to an injunction or a short lived restraining order “if no safety was given.”
Safety refers to a cash bond that might cowl potential prices and damages from a wrongly issued injunction.
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