Florida lawmakers are making progress on an important effort to regulate the litigation finance industry. This comes amid arguments asserting that investor participation in lawsuits could potentially expose the country’s courts to domestic or foreign manipulation. A bill proposed by Senator Jay Collins received favorable votes from a state Senate committee, necessitating litigants to reveal financial backing from investors pursuing a return upon successful cases.
“The ability to step in and have sway in our court system, that’s frightening,” Collins noted. The Senate Committee on Fiscal Policy has shown immense support for the bill (SB 1276), with an approval vote of 15 to six.
Bloomberg Law reports that the bill is part of a broader set of proposals supported by organizations such as the U.S. Chamber of Commerce. Introduced this year in various states, these proposals aim to curb the thriving $13.5 billion litigation finance industry, with similar bills being launched in Kansas, Rhode Island, and Arizona in January.
The Florida bill encompasses more than merely revealing details of a litigation finance agreement. It further outlines requirements for disclosing foreign investments, a move influenced by a federal bill proposed last year by Senators John Kennedy and Joe Manchin.
According to Nathan Morris, a senior vice president at the Chamber’s Institute for Legal Reform, “Floridians should know when and how outsiders, like hedge funds and foreign governments, are funding lawsuits in exchange for big pieces of settlements or awards.”
However, the bill is facing criticism. Democratic State Senator Shevrin Jones suggested during the hearing that the bill might not be necessary, expressing disbelief over the perceived national security concerns and potential foreign manipulation.
All eyes are now on the bill’s progression as it awaits approval from the House and Senate before potentially reaching the desk of Governor Ron DeSantis for his possible signature.