Requires disclosure of third-party litigation funding agreements and establishes certain responsibilities for litigation funders.
What changed between versions
A new defined term 'administrative action' is added, covering any administrative proceeding before an executive branch agency or administrative tribunal of the state, except workers' compensation claims. Throughout the bill, references to 'civil action' are expanded to 'civil or administrative action,' broadening the law's reach to include administrative proceedings.
A new defined term 'pre-settlement funding' is added, meaning funding solely intended to pay costs of living or other personal or familial expenses during the pendency of an action where those funds are not used to defray litigation expenses.
A new Section 6 exempts pre-settlement funding obtained by an individual party from all provisions of the act, creating a carve-out for individuals who receive funding purely for living expenses during litigation.
The nonprofit pro bono exemption is broadened: court-ordered awards of costs or attorney fees are now extended to awards ordered by a court, executive branch agency, or tribunal, not just courts alone.
The original Section 2 required automatic disclosure of litigation funding agreements to the court and all parties without awaiting a discovery request. This is replaced with a requirement that parties provide the agreement to the court for in camera review within 30 days after commencement or execution (whichever is later), and allows opposing parties to seek discovery upon showing relevance, potential violation, or other good cause.
Joint liability for costs and monetary sanctions (Section 3c) is changed from an automatic obligation to one that the funder must agree to as a condition of providing funding. The language also shifts from 'funded party' to 'the party whose civil or administrative claims is subject to the funding agreement.'
Enforcement authority is expanded beyond courts to include executive branch agencies and tribunals, which can now find litigation funding agreements unenforceable and impose sanctions for noncompliance.
