House Commerce panel hears bill to require disclosure of third-party litigation financing

Representative William Cole opened a public hearing before the House Commerce Committee to introduce House Bill 733, a proposal to require disclosure and reporting of third‑party litigation financing (TPLF) in New Hampshire. "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, noting the bill is modeled on a recent NCOIL draft and pointing committee members to specific pages and lines in the bill for definitions and disclosure requirements.

Cole told the committee the legislation is aimed at transparency: parties and courts currently may not know the identity of outside funders and, he argued, unregulated funders can attract hedge funds and foreign entities. He said TPLF has grown into a global industry and warned it can discourage settlements and contribute to "upward pressure on insurance costs," which he described as a state-level "tort tax." He directed the committee to the bill's proposed guardrails and mandatory disclosure sections (sponsor referenced pages 3, 6 and 9 of the draft).

Brandon Gerat, senior assistant attorney general and chief of the Consumer Protection and Antitrust Bureau at the New Hampshire Department of Justice, did not take a position on the policy but told the committee he was concerned the bill's enforcement language would leave the attorney general's office with only a limited civil‑penalty remedy. "If I'm reading it correctly, there is an enforcement provision ... that gives us the ability to pursue a civil penalty," Gerat said, adding that a relatively small penalty may be insufficient to deter large, well‑capitalized funders and that the AG's office typically seeks broader remedies such as injunctions and restitution under RSA 358‑A.

DJ Bettencourt, commissioner of the New Hampshire Insurance Department, said the department supports disclosure because greater transparency would help insurers "better evaluate and price policies" and thereby could ease pressures in a hard insurance market affecting nonprofits and child‑care providers. He noted that where model laws exist (he cited work by NAIC and said NCOIL model language is less common), states generally take time to vet language and recommended further interagency coordination with banking and the attorney general on enforcement and scope.

Representatives of the plaintiff bar opposed the bill. Marissa Chase, executive director of the New Hampshire Trial Lawyers Association, said the proposal is "very biased and one‑sided," and that it seeks disclosure only on the plaintiff side. Samantha Heering, an attorney with Shaheen & Gordon and a member of the trial lawyers' board, said New Hampshire court rules already provide discovery tools and judicial oversight that address disclosure and relevance in litigation, and she urged continued reliance on in‑court processes such as in‑camera review rather than a broad statutory regime.

Supporters included the Business & Industry Association, the American Property Casualty Insurance Association, the New Hampshire Association of Domestic Insurance Companies and major insurers including AIG and State Farm. Nate Gries of the Business & Industry Association said New Hampshire has become a target market for outside funders and urged disclosure so courts and parties can understand funding dynamics. Jim Hatem of State Farm and Nathan Fennecke for AIG said required disclosure would make costs and interests clearer to consumers and defense counsel and could influence settlement dynamics.

Representatives of firms that provide consumer legal funding and litigation financing also testified. Eric Schuler of the Alliance for Responsible Consumer Legal Funding (ARC) described two distinct products—consumer legal funding (small advances to individuals for household needs) and larger commercial litigation financing—and said the bill's updated draft better distinguishes between those products. Schuler also said responsible companies welcome reasonable guardrails and registration.

The hearing produced questions from committee members about the bill's references to federal regulations and a governor's designation of foreign threats (witnesses said the language traces to model text and can be refined). Witnesses and members discussed which state agency should receive and enforce reports; Bettencourt said the draft currently points to the Secretary of State for registration but that enforcement authority for consumer or financial rules might fall to other agencies.

The committee closed the public hearing on HB 733 and moved on to other agenda items; the transcript does not record a committee vote on the bill. The sponsor said he planned to incorporate a small drafting change described to the committee and to work with counsel on placement of a missing clause.

This hearing added detail on enforcement and agency jurisdiction and gathered contrasting views from the insurance industry, the attorney general's office, the plaintiff bar and funders. No formal committee action on HB 733 was recorded in the transcript.