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Georgia Senate Unanimously Approves Governor’s Litigation Funding Bill

By Harry Moran |
March 3, 2025

Georgia Senate Unanimously Approves Governor’s Litigation Funding Bill

As LFJ reported last week, momentum continues to build behind state-level legislative proposals that seek to impose new rules governing the use of third-party litigation funding in the U.S. 

Reporting by the AP covers a new development in the Georgia state legislature, where the Senate has unanimously passed the second part of Gov. Brian Kemp’s legislative package aimed at tort reform and third-party litigation funding. Senate Bill 69, which passed the Senate last Thursday with 52 Yea votes, amends state law to include new provisions governing the involvement of litigation funders.

SB 69 requires third-party funders register with Georgia’s Department of Banking and Finance, as well as prohibiting any foreign individuals or organisation from funding litigation in the state. The bill also sets out disclosure requirements for cases where a litigation funding agreement is present and puts in place restrictions on a funder’s ability to control the litigation process.

Senate President Pro Tem John Kennedy, a sponsor of the bill, said that SB 69  “combats the growing foreign influence” in Georgia lawsuits, and argued that the new rules contained within the bill act as a “consumer protection measure”. The Georgia Trial Lawyers Association, which opposes these attempts at reform, stated that there is “still work to be done to ensure SB 69 fairly addresses its intended purpose”. 

SB 69 will now join SB 68, the part of Gov. Kemp’s package that primarily deals with tort reform, to be debated in the House and scrutinised by a bi-partisan subcommittee convened by House Rules Committee Chairman Butch Parrish. 

The full text and status of Senate Bill 69 can be accessed on the Georgia General Assembly website.

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Harry Moran

Harry Moran

Commercial

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Commercial

Academics Fact-Check German Business Lobby’s Case for Restricting Litigation Funding

Two competition law academics have published a point-by-point examination of the German Chamber of Commerce and Industry's position on collective redress and litigation funding, concluding that several of the central claims advanced in support of tighter restrictions are false, misleading or unsupported.

As set out in a Kluwer Competition Law Blog analysis by Eduardo Silva de Freitas of the Asser Institute and Lena Hornkohl of the University of Vienna, the DIHK statement calls for litigation funders to be brought under supervision comparable to financial market regulation and for funding agreements to be disclosed in full. The authors test five of its underlying assertions.

The DIHK's claim that transparency requirements are lacking is assessed as false: Article 10 of the Representative Actions Directive already establishes disclosure obligations for litigation funding arrangements. The assertion that funders operate in a "nearly unregulated space" is described as misleading, the authors pointing to a European Commission study finding that third-party funding legislation exists in the vast majority of EU member states.

The claim of a widespread consensus that the Directive requires significant improvement is treated as unsupported, with the authors finding no sufficient body of independent studies behind it. The criticism that no minimum registration period applies to qualified entities is called misleading, since Article 4(3)(a) requires 12 months of actual public activity before designation.

The analysis reserves particular attention for the DIHK's figure that funders typically take 20% to 50% of damages. The authors describe this as misleading, noting that German law caps funder remuneration at 10% and that differentiated models operate below that level.

Commercial

Law Firms Turn to MSO Structures to Access Outside Capital and Partner Liquidity

Management services organisations have become a leading route for outside investors to participate in the economics of US law firms without breaching the prohibition on non-lawyer ownership, and the structure is drawing sustained interest from private capital.

As explained in a Nixon Peabody analysis by Allan H. Cohen and Samantha R. Barbere, an MSO is a non-professional entity that provides administrative and support services to a professional practice. The arrangement separates professional ownership from administrative infrastructure: non-licensed investors may own the MSO, while licensed attorneys retain exclusive control of the law firm and all legal work.

The authors identify two principal motivations driving adoption. The first is access to capital, giving firms resources to invest in technology such as artificial intelligence and cybersecurity at a time of escalating client demands for efficiency. The second is partner liquidity — the bifurcated structure allows partners to monetise the value of their ownership through a sale to non-professional investors, expanding options beyond traditional buyouts and transactions between lawyers.

Execution requires care. Firms must transfer non-professional assets to the MSO and enter into an administrative services agreement governing the relationship. Critically, fees paid to the MSO must reflect fair market value for the services provided, rather than a percentage of revenue, in order to comply with the fee-splitting prohibition in ABA Model Rule 5.4(a).

For the litigation finance market, the structure matters because it represents a parallel channel for outside capital to reach the legal services sector — one that competes with, and in some cases complements, case-level and portfolio funding as a means of financing law firm growth.

Commercial

Govia Thameslink Class Action Collapses After Funding and Insurance Fall Through

A long-running opt-out collective action against Govia Thameslink Railway has come to an end after the claim failed to secure a replacement class representative backed by adequate funding and insurance, marking one of the more consequential funding-driven failures in the Competition Appeal Tribunal's collective proceedings regime.

As reported by Global Competition Review, the claim has collapsed as a result of funding problems. The proceedings, certified in October 2022, alleged pricing discrimination in the operator's fare structure on behalf of rail passengers.

The claim was left without a class representative following the death of David Boyle, who had brought the action. Walter Merricks, best known for leading the Mastercard collective action, applied to take over the role but withdrew in January 2026 after being unable to obtain after-the-event insurance for the proceedings.

That withdrawal carried its own consequences. As reported by the Law Society Gazette, the Tribunal ordered interim payments totalling £70,000 — £45,000 to the defendants and £25,000 to the estate — finding it "beyond argument" that reasonable costs incurred should be borne by Merricks and his funder, Litigation Capital Management. The Tribunal considered the £337,695 originally claimed to be excessive.

With the proceedings stayed, the Tribunal set a deadline of 4pm on 24 July for an application to approve a suitable replacement class representative, failing which the collective proceedings order would be revoked and the claim decertified.

The outcome underscores how tightly the viability of UK collective proceedings is bound to the availability of funding and ATE cover, and how quickly a certified claim can unravel when either becomes unobtainable.