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House Judiciary Committee advances bill requiring disclosure of litigation funders after months of debate
Summary
After hours of testimony from business groups, insurers, litigation funders and plaintiffs’ lawyers, the House Judiciary Committee gave Senate Bill 12-15 a due‑pass recommendation with amendments to require narrow disclosure of third‑party litigation funding and limit foreign‑adversary influence.
The House Judiciary Committee on March 25 approved Senate Bill 12-15 as amended, a measure designed to increase transparency around third‑party litigation financing.
Sponsor proponents portrayed the bill as a consumer‑protection measure that helps defendants and courts know who is financing a lawsuit, while protecting litigants’ decision‑making and limiting foreign‑adversary funding. Senator Leach and others said disclosure would make the financing behind lawsuits visible to judges and opposing parties and allow courts to address conflicts of interest.
Opponents, including representatives of litigation‑funding companies and some plaintiff attorneys, warned disclosure could chill access to funding that enables small plaintiffs and novel claims to survive against deep‑pocket defendants. Witnesses offered examples of funders financing complex intellectual‑property and mass‑tort litigation, and funders argued that confidentiality obligations and securities rules limit what they can disclose.
During the hearing, several business groups and insurers said the bill is necessary to prevent funders from exerting strategic influence over cases and to guard against potential foreign interference in U.S. litigation. Funders and some plaintiff lawyers countered that the practice can help “Davids” win against “Goliaths” and that the industry is already subject to various rules.
The committee adopted a multi‑page amendment in Representative Culligan’s name that narrowed certain disclosure paths and clarified exceptions, including limited in‑camera review procedures for more sensitive requests. After extensive questioning and back‑and‑forth about attorney‑client privilege and the practical effect of early disclosure, the committee voted to give the bill a due‑pass recommendation as amended.
What’s next: The bill moves to the floor with committee changes; supporters said they will continue stakeholder talks to clarify remaining concerns.
Speakers quoted in committee included Senator Leach (sponsor), Chad Heinrich of the NFIB, Wendy Briggs of Veritas (representing insurance interests), Alex Chukri of a litigation‑funding firm, and lawyers for the Arizona Justice Project and others.
