State legislatures are increasingly scrutinizing third-party litigation funding (TPLF), a practice where outside entities invest money in lawsuits in return for a portion of the settlement or judgment. This shift towards greater transparency in TPLF was discussed at the recent National Conference of State Legislatures legislative summit held in Louisville, Kentucky.
Phil Goldberg, managing partner at Shook, Hardy & Bacon LLP, remarked that TPLF is “reshaping every aspect of litigation.” The conversation is becoming “much more present” in state legislatures, as lawmakers weigh the benefits of disclosures against the need for financial privacy for litigants. Sponsored by Johnson & Johnson, the session underscored the growing attention on the regulatory frameworks needed to manage this evolving financial practice.
Several states, including Indiana, West Virginia, and Louisiana, have already embarked on initial steps to regulate outside funding for lawsuits. This push comes amidst concerns that TPLF could unduly influence legal strategies and outcomes. While the rise of TPLF offers litigants access to much-needed resources, it also raises complex questions about control, ethics, and financial transparency.
For further details, you can read the full article on Bloomberg Government.