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Indiana, West Virginia Go New Restrictions on Third-Get together Litigation Financing



Efforts to reign in third-party litigation financing are on their solution to changing into legislation in Indiana and West Virginia, a scorecard that’s lower than what enterprise and insurance coverage pursuits had hoped for this spring.

In Indiana, Gov. Eric Holcomb signed House Bill 1160, which goals to dam international entities from funding lawsuits. It additionally bars events concerned within the litigation from sharing with financiers any data {that a} court docket has ordered sealed, and forbids finance companies from influencing the end result.


Financing agreements will now be topic to discovery.

The invoice handed with overwhelming help, with no dissenting votes within the Home and solely two within the Senate.


The American Property Casualty Insurance coverage Affiliation stated the Indiana legislation would assist promote a extra clear authorized system.

“Requiring disclosure and discovery of funding by third events concerned within the litigation and to the courts is a crucial step to restoring steadiness to the authorized system,” Brooke Kelley, APCIA assistant vice chairman of state authorities, stated, in accordance with an AM Finest report. “These commonsense guardrails round third-party litigation funding are essential to facilitate litigation transparency and defend shoppers and companies.”


The legislation follows a invoice signed final 12 months that made third-party financing agreements topic to discovery.

West Virginia’s Senate Bill 850 would, if signed into legislation by coal firm proprietor, Gov. Jim Justice, place a lot of restrictions on lawsuit funding. The invoice would bar financiers from:

  • Providing commissions to attorneys and medical suppliers who refer shoppers to a financing program.
  • Promoting false or deceptive details about its companies.
  • Referring shoppers to particular attorneys or medical suppliers.

The buyers in litigation additionally should present copies of all financing contracts to shoppers; and should not try to waive settlements or require arbitration within the authorized dispute. Finance companies additionally should not assign or securitize a financing contract to a different celebration, if the invoice turns into legislation. Any violation of the legislation would make the financing contract unenforceable, the invoice notes.

“A litigation financier might not cost a client who’s a pure individual an annual price of greater than 18 % of the unique amount of cash offered to the buyer for the litigation financing transaction,” reads the invoice, which was sponsored by state Sen. Charles Trump.

SB 850 handed the West Virginia state Senate in February and the Home on March 9. It was despatched to the governor March 12.


The APCIA, the U.S. Chamber of Commerce and others had urged extra states to undertake related laws this 12 months. Not less than 10 states, together with Georgia, Florida, Ohio, Missouri, Iowa, Kansas and Oklahoma, noticed payments launched, in accordance with a LexisNexis tally, however none of these have superior.

Florida’s invoice handed a key committee however didn’t survive past that within the session that ended March 9.


West Virginia


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