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Committee approves bill to regulate litigation financing after competing testimony
Summary
HB 21-08 would require disclosure of outside litigation funders, ban funder control and foreign-adversary funding, and add fee limits; the committee advanced the bill after extended expert testimony from funders and business groups and back-and-forth with sponsor amendments.
The House Commerce Committee voted to advance HB 21-08, legislation that would regulate commercial litigation financing by requiring disclosure of funders, barring funder control over litigation decisions, prohibiting funding by foreign adversaries, and placing limits on fees paid to funders. Sponsor language was described as a negotiated compromise between the Tennessee Chamber and trial attorneys to bring transparency and guardrails to an industry that has grown rapidly over the past two decades.
Phil Goldberg of the Institute for Legal Reform (speaking for the U.S. Chamber of Commerce) told the committee the bill "requires disclosures when investors are in a case" and said the measure is intended to bring the industry out of the shadows and protect the integrity of civil justice. Representatives of the litigation‑funding industry pushed back. Daiwa Chinfimen (representing the International Legal Finance Association) said, "I'm here to oppose this bill," warning that joint-and-several liability and fee caps could drive funders from Tennessee and make it harder for small plaintiffs to pursue high‑value claims. Other funders and lawyers argued disclosure is reasonable but said some proposed caps and joint-liability provisions would blunt commercial funding markets and prevent David‑vs‑Goliath plaintiffs from obtaining capital. After committee Q&A and debate, the clerk reported the final tally as 16 ayes and no nays and the bill was advanced to the next referral.
