For the second time in as many weeks, the House Justice Appropriations Subcommittee deferred a vote on legislation to crack down on the $13.5 billionthird-party litigation financing industry.
Subcommittee member and Jacksonville Republican Rep. Wayne Duggan was absent, and Republican committee members Reps. Mike Beltran, Mike Redondo and Paula Stark did not support the measure. That meant had the Democrats on the committee voted in a bloc, the bill would have died by an 8-6 vote. The bill cleared its first committee by a 10-7 vote.
The bills are a top priority for the Florida Justice Reform Institute and the American Tort Reform Foundation, which repeatedly referenced third-party litigation financing in its 2023-24 Judicial Hellhole Report.
The bills would create a new section of law called the Litigation Investment Safeguards and Transparency Act and establish definitions for, among other things, “litigation financing,” “foreign persons” and “foreign principals.”
The proposals would require lawyers who enter into third-party litigation agreements to disclose that information to their clients as well as the court, opposing counsel, and any known person, such as an insurer, with a preexisting contractual obligation to indemnify or defend a party to the action.
Rep. Tyler Sirois had prepared an amendment on HB 1179 that was designed to assuage the concerns of Beltran and some others that the bill would require the plaintiff’s attorneys to disclose the information to their opponent’s counsel and the court. Sirois amendment would have excluded from the information that needed to be reported the dollar amounts being financed and provisions regarding attorney fees and costs before making such disclosure.
The bills ban litigation financing companies from receiving a larger share of the proceeds than the plaintiffs after the payment of attorney fees and costs. Additionally, litigation financiers could not, under the proposal, make any decision concerning legal strategy.
If the litigation financing company has international ties, lawyers also must disclose the name, address, citizenship, country of incorporation, or registration of any foreign person, foreign principal or sovereign wealth fund.