Kansas Governor Approves Litigation Funding Bill with Limited DIsclosure Requirements
Whilst many state legislatures across the U.S. are moving forward with bills imposing blanket restrictions and oversight measures on litigation funding, one state has demonstrated that there is the possibility for legislation to be drafted with a more balanced approach to the issue.
An article in Bloomberg Law covers the passage of a new litigation funding legislation in Kansas, with Governor Laura Kelly approving a bill that seeks to improve transparency around third-party funding whilst still maintaining reasonable levels of confidentiality for those parties involved in funding agreements.
The Substitute for Senate Bill 54 takes a more nuanced approach than similar bills passed by other state legislatures, requiring disclosure of funding arrangements with foreign funders from countries that are considered an adversary by the US government. A further important limitation on the scope of the disclosure requirements in this bill is that it only requires disclosure of the funding agreements to the judge in each case, with no mandatory disclosure to all parties involved in the litigation.
The bill is also notable for being seen as a compromise between two of the most vocal organisations on either side of the debate around the regulation of funding: the International Legal Finance Association and the US Chamber of Commerce, supported by Kansas’ own Chamber of Commerce.
Paul Kong, executive director of the International Legal Finance Association, thanked the state’s legislature for arriving at “a reasonable, sensible solution”, and urged opponents of the funding industry not to pursue sweeping regulatory bills “that are a solution in search of a problem that does not exist.” Eric Stafford, senior director of government affairs at the Kansas Chamber of Commerce, similarly expressed satisfaction that “the opponents from last year’s bill and proponents of the bill have been able to reach a compromise.”
The full text of the bill can be read here.