Senate Judiciary Committee advances bill requiring disclosure of third‑party litigation funding

The Senate Judiciary Committee on an amended voice vote advanced the senate substitute for Senate Bill 54, which would require parties in civil cases to disclose third‑party litigation funding agreements to the court and to other parties and direct the Judicial Council to study and report on the topic.

The motion to move the bill out of committee was made by Senator Shane and seconded by Senator Bowser; the committee approved the motion by voice vote.

The substitute directs a party that has a third‑party litigation funding agreement to provide the agreement to the court within 30 days after the action is commenced or within 30 days after the agreement is executed, whichever is later, and to serve a sworn statement on the other parties within the same 30‑day period listing required information about the funding arrangement. The reviser explained that the substitute preserves limits saying disclosure does not automatically make the agreement admissible as evidence and does not require nonprofits to disclose members or donors.

The substitute also requires that, beginning after courts collect those agreements, courts provide them to the Judicial Council. The Judicial Council would be required to provide a party that submitted a funding agreement documentation confirming receipt. The clerk of the court will prescribe a form for the reports, and those filings are described in the substitute as confidential under the state open‑records law.

Committee members discussed and later approved an amendment changing the Judicial Council study and reporting timeline. The amendment replaces an earlier July 1, 2025, reporting date with a requirement that the Judicial Council study the issue with a required report and recommendations due to the chief justice, the attorney general, the Senate Judiciary Committee and the House Committee on Judiciary by January 1, 2030, and that the Judicial Council report annually on the total number of reports received beginning January 1, 2031. Senator Klipp asked why the timeline was extended; proponents said the change aligned reporting with the Judicial Council’s normal process and would provide better data over a longer period.

Senator Shane characterized the substitute as the product of work by proponents and opponents and called it an “appropriate compromise bill.” Senator Titus said he had been involved as the measure evolved and that the parties had reached “a good place.” The reviser answered procedural questions about retained definitions, added definitions (including terms related to foreign persons and countries of concern), and the confidentiality of the collected reports.

The substitute explicitly states that disclosure requirements are not intended to modify other rules of evidence or civil procedure. It also directs the Judicial Council to include in its report a recommendation on the use of third‑party litigation funding agreements and whether continued reporting on those agreements should continue.

The committee approved the senate substitute for Senate Bill 54 as amended and moved it out of committee favorably.

Looking ahead, committee members said the Judicial Council’s study and the annual reporting required by the amendment are intended to give the Legislature data before any broader statutory changes would be proposed.