Legal Slice

Two bills in Louisiana are seeking to regulate the litigation finance industry. One bill requires parties to disclose litigation finance agreements within 60 days after filing a civil action, while the second requires disclosure of litigation finance if a foreign entity is the source of funding. The bills aim to restrict the practice of investors paying for the cost of lawsuits in return for a share of the proceeds. The U.S. Chamber of Commerce supports the legislation, stating that the litigation finance industry encourages frivolous lawsuits. Last year, similar legislation was vetoed by the governor, but with a change in governors, lawmakers hope for a different outcome. Other states have also introduced legislation to regulate litigation finance. The bills have faced mixed results in state legislatures, with some states enacting laws to block foreign entities from funding lawsuits. The U.S. Chamber of Commerce warns of the risks of litigation finance, stating that it pressures businesses to settle even when claims lack merit. The Chamber supports the Louisiana bills, though it considers one of the proposals to be "under inclusive." The litigation finance industry has defenders in state houses, with some arguing that the Chamber is attempting to pass a bill in support of national regulation.