We understand that the Texas Supreme Court Advisory Committee has placed proposed rule-making concerning third party litigation financing on its August 29 meeting agenda.
This is certainly timely, given that four states–Colorado, Georgia, Kansas, and Oklahoma–have already adopted rules this year. Additionally, Arizona and Montana have recently enacted statutory requirements prohibiting litigation funders from paying lawyers or health care providers commissions or referral fees (Arizona), prohibiting foreign entities from directly or indirectly from funding litigation (Arizona), mandating disclosure of TPLF agreements in all civil cases (Montana), making litigation funders jointly and severally liable for litigation expenses (Montana), and capping the amount funders can recover from a lawsuit at 25% (Montana). Legislation has also cleared the New York legislature that would require litigation funders to register with the state and establish contract and disclosure requirements. Even California is getting into the act. The California Assembly has unanimously approved legislation requiring litigation funders to be licensed and regulated by the state. You can read more about these developments in the article linked below.
We are pleased that the SCAC is taking up this issue, which clearly has become a serious matter of public policy across the country.
