Commerce Committee hears HB 733 to require disclosure of third‑party litigation financing

Representative Robert Cole, prime sponsor of House Bill 733, told the House Commerce and Consumer Affairs Committee that the bill would require disclosure of third‑party litigation financing and other “common sense” guardrails for an industry the sponsor described as large and largely unregulated.

"What is TPLF or third party litigation financing? It is when an investor helps finance a lawsuit in which the investor has no personal stake," Representative Cole said. "TPLF is estimated to be a $400,000,000,000 global industry." He pointed committee members to bill sections that define covered foreign entities and the three reporting requirements he said appear on page 9 of the draft.

The bill would require disclosure of litigation‑funding arrangements to the other parties in litigation and to the courts, and it would establish registration or reporting to a state office for funders. Cole framed the measure as a transparency reform aimed at reducing what he called "tort tax" pressures on insurance and consumer prices.

Brandon Gerat, Senior Assistant Attorney General and chief of the Consumer Protection and Antitrust Bureau at the New Hampshire Department of Justice, said he neither supported nor opposed HB 733 but warned the committee that the draft's enforcement provisions appeared limited. "I believe the enforcement provisions that have been built into this, which anticipate attorney general enforcement, perhaps are not as well thought out as they should be and don't actually provide meaningful opportunity for the attorney general's office to be able to prevent to enforce and hold accountable those who might violate this," Gerat said. He urged broader enforcement authority beyond a civil‑penalty remedy so the office could seek injunctions, restitution and other remedies under the Consumer Protection Act.

D.J. Bettencourt, commissioner of the New Hampshire Insurance Department, told the committee the insurance market could benefit from disclosure. "The disclosure that is contemplated in this legislation helps insurers meet their regulatory requirements," Bettencourt said, adding that transparency could improve underwriting, competition and claims management and — in his view — help soften the current "hard market" affecting some coverages such as nonprofit liability.

Witnesses split largely along interest lines. The New Hampshire Trial Lawyers Association, represented by Executive Director Marissa Chase and attorney Samantha Heering, opposed the bill as drafted. "This is very biased and one‑sided. This only seeks for disclosure on the plaintiff side," Chase said, arguing that existing court rules and discovery remedies already give judges tools to evaluate relevance and handle confidential documents.

Trade groups and insurers testified in support. Nate Gries of the Business & Industry Association and Cam Lapine of Orr & Reno (speaking for several insurer trade groups) said disclosure would help courts, litigants and insurers understand funding influences and litigation dynamics. Nathan Fennecke, an attorney for AIG, said the bill creates "reciprocal transparency" so both sides of litigation reveal potential financial interests in a case.

Representatives of the industry itself — Eric Schuler of the Alliance for Responsible Consumer Legal Funding (ARC) — told the committee the draft improved by distinguishing two distinct products: "consumer legal funding" (small, consumer loans for living expenses while a case proceeds) and large‑scale "litigation financing" (capital raised to fund litigation costs). Schuler reported that consumer legal funding transactions tend to be small ($3,000–$5,000 on average) while litigation financing typically involves millions and that responsible regulation, he said, can help stabilize an emergent market.

Committee members asked technical and constitutional questions about language in the draft that refers to federal regulations and a governor‑issued list or notice of countries designated as threats to critical infrastructure. Representative Spear and others pressed whether the draft properly locates authority for such a designation and the committee noted a need to review those cross‑references.

No committee vote on HB 733 was recorded during the hearing. Committee staff and witnesses indicated subcommittee work or drafting changes would follow, including discussion of enforcement language, whether the Secretary of State or another office should receive reports, and how to exclude or define ordinary consumer products and insured activities from the statute.

Next steps: the bill will return to committee work (subcommittee drafting expected) before any formal committee action.