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Subcommittee narrows disclosure bill on third‑party settlement funding, removes several prohibitions after lawyer objections
Summary
Lawyers and stakeholders debated a proposed Third-Party Litigation Funding Transparency Act; the subcommittee agreed to remove a set of prohibitions related to commercial litigation funding and asked sponsors to adjust definitions. The committee also discussed symmetry with insurer-funded defense disclosure but did not adopt new reciprocal rules.
The House Commerce and Consumer Affairs subcommittee considered a proposed Third-Party Litigation Funding Transparency Act that would require disclosure when plaintiffs secure outside financing tied to settlements.
Several attorneys and advocates testified about the draft. Nashua lawyer Anthony Scullen urged caution about provisions that would restrict interactions between funders and counsel and described potential problems in rare or complex litigation, saying the bill risks micromanaging attorney-client relationships. Industry and plaintiff‑side counsel debated how prescriptive statutory language should be about control, influence and disclosures.
Cam Lapine of Orr & Reno and other counsel representing insurers and trade groups argued for symmetrical disclosure if the committee’s concern was to inform consumers; they suggested that reserve amounts and litigation budgets for defendants (often insurer-funded defenses) would be similarly material. Other lawyers described federal civil practice differences in other jurisdictions and warned the committee not to overreach into long‑standing professional-ethics territory.
After discussion, the subcommittee agreed — by voice/hand vote in subcommittee — to delete the bill’s more prescriptive prohibitions (roman numerals 2–4 in proposed RSA 294‑F) that would have broadly barred funder influence on litigation strategy and related matters. The committee kept the disclosure requirement that a claimant must notify the court that a commercial litigation financing agreement exists but removed the more intrusive operational prohibitions; members also asked the sponsor and counsel to remove definitions tied only to the deleted prohibitions.
Members instructed staff to return a revised draft to the full committee. The chair said the subcommittee’s goal is transparency about the existence of funding arrangements, not to impose detailed operational rules that could conflict with ethical or procedural rules already enforced by courts.
