A Louisiana bill aimed at regulating the litigation finance industry has reached the desk of Governor Jeff Landry following unanimous approval by the state Senate. The legislation, known as SB 355, prohibits outside funders from exerting control over lawsuits in which they invest. Additionally, the bill mandates that funding from “countries of concern” must be disclosed to the state Attorney General.
This measure comes in the wake of former Governor John Bel Edwards’ veto last year of a broader bill that would have required more comprehensive disclosure of third-party litigation funding in civil cases. The new legislation is part of a growing trend across multiple states to increase transparency in the litigation finance industry, which is valued at $15.2 billion. The US Chamber of Commerce has advocated for such measures, arguing that the industry fosters frivolous lawsuits.
SB 355 specifically prohibits funders from dictating lawyers’ and litigants’ strategies, including decisions on settlements—a common concern among critics of the industry. Furthermore, the bill would make litigation financing contracts subject to discovery in civil cases.
An additional provision requires lawyers to disclose the identities of foreign entities from specific countries, such as Russia, China, and Iran, that are financing lawsuits in Louisiana. Copies of the funding agreements must be provided to the state’s Attorney General.
The bill shares similarities with earlier federal legislation proposed by Senator John Kennedy and House Speaker Mike Johnson, both Republicans from Louisiana. However, that federal proposal has yet to gain traction within a divided Congress.
Governor Landry has yet to indicate whether he will sign the bill into law.
Further details can be found in the original coverage by Bloomberg Law.