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Committee pauses work on third-party litigation funding bill to allow compromise language
Summary
Senate Bill 54, which would limit discovery of third-party litigation-funding agreements and require reporting to the Judicial Council, was discussed and parties agreed to compromise language; the committee recessed to allow the reviser time to draft amendments for a later working session.
Senate Bill 54, a bill that would set a test for courts to determine when discovery of third-party litigation-funding agreements is appropriate and would require reporting of such agreements to the Judicial Council, was the subject of lengthy discussion and a party-negotiated compromise during the committee meeting.
The reviser's explanation described the bill's two core parts: a test for courts to weigh whether discovery of the existence and content of third-party funding agreements should be allowed, and a reporting requirement to the Judicial Council for study and possible recommendations.
Senator Shane presented compromise language negotiated between proponents and opponents that narrows and specifies the categories of information to be disclosed. Under the proposed compromise, disclosures would identify contracting parties, any funder control or approval rights over litigation decisions, whether a funder may receive confidential materials, known relationships between a funder and an adverse party/counsel/court, the nature of the funder's financial interest (including recourse vs. nonrecourse), and whether a foreign person from a designated country is providing funding.
Committee leaders said they needed time to convert the agreed language into amendatory format. Because this was the last day before turnaround, the committee agreed to stand in recess and reconvene later the same day (or at 5 p.m.) so the reviser could prepare the amendment in the official format and members could continue work. The committee did not vote on final passage during the session; work was paused to finalize amendment text.
