Committee hears dueling views on third‑party litigation funding bill
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Summary
Lawmakers debated a bill requiring disclosure and limits on third‑party litigation funders; business groups said disclosure prevents "dark money," while litigation‑finance firms said Tennessee lacks a local problem and the bill would create confusion and unintended liability.
Sen. Vice Chair Taylor brought SB 2101 to the committee, describing the measure as a response to concerns that third‑party litigation funders can control litigation decisions and access discovery. “It requires disclosure of third‑party funders, prohibits funders from controlling litigation decisions such as strategy or settlement, bans foreign adversary funders and caps funder recovery,” Taylor said as he described the amendment that makes the bill.
Mark Barrons, representing the United States Chamber Institute for Legal Reform, testified in support: “We like to call this dark money because in many places, we don't know who is funding the litigation,” he said, urging disclosure so Tennessee judges and parties will know who the real parties in interest are.
Opposing the bill, Dai Wei Chin of the International Legal Finance Association said there is no evidence of abuse in Tennessee and cautioned the bill’s exemptions (for commercial torts) and joint‑and‑several liability rules could generate confusion and chill legitimate funding that provides consumer access to justice. “This is part of a national coordinated lobbying campaign,” the witness told the committee, and warned that the bill’s drafting could carve out large swaths of regulated activity and create litigation over statutory definitions.
Committee members asked whether the bill would harm consumers who rely on funding to advance claims; proponents said it preserves contingency‑fee litigation while preventing undisclosed outside influence. After questions and cross‑talk, the sponsor moved the amendment and the committee adopted it and moved SB 2101 to the committee calendar.
