A Louisiana bill regulating the litigation finance industry has been passed by the state legislature and is awaiting Gov. Jeff Landry’s signature. The bill, SB 355, received unanimous approval from the state Senate and aims to prevent outside funders from controlling cases in which they invest. It requires parties in lawsuits to disclose funding from certain countries to the state attorney general.
Gov. Landry, a Republican, has not yet indicated whether he will sign the bill. In contrast, his predecessor, Democrat John Bel Edwards, vetoed a more expansive legislation last year that would have required third-party funding disclosures in civil cases. The current bill is part of a broader effort in various states to mandate disclosure of litigation funding arrangements, where investors finance lawsuits in exchange for a portion of any successful outcomes.
The US Chamber of Commerce has been leading the charge against the $15.2 billion litigation finance industry, arguing that it supports frivolous lawsuits. The Louisiana bill would prohibit funders from directing lawyers and parties on how to handle suits, including settlement decisions. It also mandates that litigation financing contracts be subject to discovery in civil cases.
Additionally, the bill would require lawyers to disclose the names of foreign entities from countries like Russia, China, and Iran providing funding for lawsuits in Louisiana to the attorney general. This provision mirrors federal legislation introduced last year by Sen. John Kennedy and House Speaker Mike Johnson, both Republicans from Louisiana. However, the federal bill has not made progress due to the political divide in Congress.
Overall, this Louisiana bill seeks to bring transparency and accountability to the litigation finance industry by preventing outside funders from controlling cases and ensuring that all parties involved are aware of any foreign funding sources providing support for lawsuits within state borders.
