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Committee advances bill to regulate third‑party litigation financing after testimony on discovery and national‑security risks
Summary
HB 2108 would require disclosure of litigation financing agreements, bar funders from directing strategy or taking disproportionate upside, and prohibit certain foreign adversaries from funding lawsuits; the committee voted 6–0 to send the bill to Commerce after testimony from the U.S. Chamber and plaintiff‑side lawyers.
Leader Boyd described House Bill 2108 as targeted reforms to the developing industry of third‑party litigation financing. He said the bill would (1) prohibit foreign adversaries and certain sovereign wealth funds from funding consumer litigation, (2) require litigation financing agreements to be discoverable, (3) prevent financers from directing litigation strategy or settlement decisions, (4) require financers to participate in costs and not only capture upside, and (5) prevent financers from securing larger economic benefits than the plaintiff.
Mark Behrens, appearing for the U.S. Chamber of Commerce, told the committee banks and big investors are treating litigation as an investment and raised national‑security concerns about foreign funders obtaining trade‑secret information. "The banker can't control their own lawsuit," Behrens said, arguing the bill would protect clients' control over litigation. Brandon Bass, representing the Tennessee Trial Lawyers Association, opposed broad discovery of law‑firm finances, saying "it's intrusive and it has nothing to do with the merits of the case." Sponsor Boyd and other members discussed limiting the scope of discovery; Boyd committed to consider tightening language and offered to return with an amendment to limit discovery to whether financing exists rather than probing entire firm finances. The committee voted to advance the bill to Commerce (6–0).
