The Florida Senate Judiciary Committee has approved legislation that would impose new disclosure requirements and restrictions on litigation financing agreements involving foreign entities.
Senate Bill 1396 would require disclosure of any litigation financing agreement involving a person, including a foreign individual, principal, or sovereign wealth fund, although specific terms of such agreements would not need to be revealed. The bill also establishes several prohibitions on litigation financiers’ activities.
Under the proposed legislation, litigation financiers would be barred from directing legal proceedings, paying referral fees or commissions to any person, securitizing a litigation financing agreement, and receiving more than their authorized share of proceeds or a higher share of a settlement than the plaintiff.
The measure would also give courts the authority to consider the existence of a financing agreement when determining the adequacy of a class action plaintiff representative or counsel.
House Bill 1157, which mirrors the Senate bill’s provisions, was introduced earlier this month and is being reviewed by the Civil Justice and Claims Subcommittee, BestWire reported.
The American Property Casualty Insurance Association (APCIA) praised the Senate committee’s approval, describing the bill as a step toward transparency in what it calls a “highly predatory” litigation financing industry.
“Third-party litigation financing is a secretive and unregulated practice where lenders, often hedge funds or foreign actors, are able to charge exorbitant interest rates that could leave a victim with little to no award money,” Chase Mitchell, APCIA assistant vice president of state government relations, said in a statement. “The lack of regulation also means that courts and defendants do not know when a third-party lender is involved or who they are.”
Florida is not alone in seeking to regulate third-party litigation financing. Several states, including Arizona, Colorado, Georgia, Kansas, Montana, and Oklahoma, adopted measures in 2025 requiring disclosure of litigation financing agreements and limiting funders’ influence over case strategy. Georgia’s SB 69, for example, requires funders to register with the state, allows their agreements to be discoverable, and bars them from influencing settlements. Colorado’s HB 25‑1329 targets foreign funders specifically, mandating disclosure to the attorney general and prohibiting interference with attorneys or settlements. Kansas law similarly requires disclosure of foreign-linked funding to judges.
If enacted, Florida’s legislation would take effect on July 1. The disclosure requirements would not apply retroactively.
