The Louisiana legislature has recently passed a bill regulating the litigation finance industry in the state. Known as SB 355, the bill is awaiting Governor Jeff Landry’s signature. This legislation aims to increase transparency in litigation funding arrangements where investors fund lawsuits in exchange for a share of the proceeds in successful cases.
The US Chamber of Commerce has been a key advocate for these efforts, arguing that the litigation finance industry encourages frivolous lawsuits. The Louisiana bill specifically prohibits funders from directing lawyers and parties on how to pursue suits, including settlement decisions. It also makes litigation financing contracts subject to discovery in civil cases. Moreover, the bill requires lawyers to disclose the names of foreign entities from countries of concern financing lawsuits in Louisiana to the state attorney general, specifically targeting entities from Russia, China, and Iran.
Similar legislation was introduced at the federal level last year by Sen. John Kennedy and House Speaker Mike Johnson, both Republicans from Louisiana. However, the federal legislation has not progressed far and faces challenges in a divided Congress.
