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Senate approves measure to regulate third‑party litigation financing and make agreements discoverable
Summary
The South Dakota Senate unanimously passed Senate Bill 175, which requires disclosure of third‑party litigation financing agreements, imposes licensing and consumer-protection rules, and limits funder compensation. Sponsors said the measure protects the attorney–client relationship and reduces outside influence on litigation strategy.
Senate Bill 175, to regulate third‑party litigation financing, passed the South Dakota Senate unanimously (35-0) on Feb. 20, 2025.
Sponsor Senator Wheeler described third‑party litigation financing as a growing concern where outside investors fund lawsuits in exchange for a share of any recovery. Wheeler said such arrangements can incentivize funders to push for trial outcomes that maximize investor return rather than the client’s best interest. The bill requires financiers to hold a…
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