Hearing on regulating third‑party litigation financing draws debate over disclosure and consumer risk

The House Industry, Business and Labor Committee heard testimony on House Bill 13 72, a proposal to regulate third‑party litigation financing (TPLF) by requiring licensing, disclosures and consumer protections, witnesses said.

Representative Lawrence Clameen, the bill sponsor, introduced the measure as a response to growing use of litigation financing. "Litigation financiers are unregulated in North Dakota unlike other lenders," Clameen said, and the bill would require annual licensing by the Department of Financial Institutions and written contracts with specified disclosures.

Supporters, including the American Property Casualty Insurance Association (APCIA), the Greater North Dakota Chamber and the North Dakota Motor Carriers Association, said the bill is primarily about transparency. Brooke Kelly of APCIA described TPLF as a global business and argued undisclosed funder involvement can prolong litigation and divert settlement proceeds from injured plaintiffs. "This is about transparency," Kelly said, urging the committee to require funders to disclose their financial relationships so courts and parties can evaluate potential conflicts.

APCIA counsel Rhonda Hurwitz and Corey Krebs of the Department of Financial Institutions walked the committee through the bill’s major provisions: licensing and…