Louisiana Advances Legislation to Regulate Litigation Funding
The push for increased regulation of litigation financing across several US states has been gaining momentum this year, with new bills announced, and in some states like Montana, those bills being signed into law. This campaign does not appear to be losing steam, as the Louisiana legislature has advanced its own regulatory bill. An article in Bloomberg Law details the advancement of a bill in the Louisiana legislature that seeks to increase the level of regulation over litigation funding in the state. Compared to similar bills announced or passed in other states, the Louisiana bill goes further in requiring the production and disclosure of litigation finance agreements to the courts within 60 days of being signed. If plaintiffs and their funders do not provide the agreement within the timeframe, the contractual agreement will be deemed unenforceable. The bill’s sponsor, State Senator Barrow Peacock, has argued that litigation funding has “flourished in the shadows with very minimal oversight”, and repeated the common refrain from the US Chamber of Commerce that litigation funding represents a threat to national security. The Chamber’s senior vice president of legal advocacy argued that the bill does protect the plaintiff and funder’s sensitive information, as the bill gives the court the power to modify any disclosure of the funding agreement to redact proprietary information. Dai Wai Chin Feman, director of commercial litigation strategies at Parabellum Capital, had testified in opposition to the bill during its passage, stating that the concern around national security was “entirely speculative” and described these claims as “careless and baseless accusations without any evidence or facts”. The bill will go to the House as early as next week for further amendments, before being sent back to the Senate, with the bill’s supporters hoping that a mutually agreed draft can be sent on to the governor to be signed into law.
