Georgia has taken a definitive step in regulating the burgeoning litigation funding industry as Governor Brian Kemp signed a new law on Monday aimed at bringing transparency and oversight to the sector. This newly minted legislation is set to make funding agreements discoverable in court, a move that could significantly impact the $15.2 billion litigation funding industry, which has been facing an increasing number of state-level regulatory challenges.
The regulation prohibits outside funders from exerting control over legal cases they finance. Specifically, funders are barred from influencing decisions about legal counsel and settlements in cases they bankroll. This ensures that the prosecutorial integrity of cases is maintained, preventing funders from driving strategies that serve their financial interests rather than legal or ethical outcomes.
An additional layer of scrutiny will be imposed through required registrations with the state, further indicating Georgia’s commitment to oversight. The law also prohibits foreign governments and entities identified by the US Commerce Department as foreign adversaries from funding legal cases within the state’s judicial system. This restriction aims at averting potential national security concerns and conflicts of interest in legal proceedings.
Governor Kemp remarked that this legislative decision marks a triumph for the residents of Georgia, who will benefit from a more balanced legal framework. His remarks underscore a broader sentiment that the previous unregulated environment posed a risk to the objectivity and fairness of judicial processes.
The adoption of this law illustrates Georgia’s proactive approach to regulating litigation funding, a sector gaining traction due to its potential for high returns on investment. It also highlights a growing trend among states to introduce similar regulatory measures. For more detailed coverage of this development, you can read the original report on Bloomberg Law.