What's Happening?
Florida lawmakers are revisiting efforts to impose restrictions on third-party litigation funding, a move aimed at reducing excessive legal costs. House Bill 1157, introduced by Rep. Fabian Basabe, and its companion Senate Bill 1396, sponsored by Sen.
Colleen Burton, seek to limit the influence of third-party financiers in legal proceedings. These bills are supported by the U.S. Chamber of Commerce and aim to prevent foreign entities from manipulating Florida's legal system. The proposed legislation would restrict funders from directing legal strategies or receiving larger settlements than plaintiffs. Additionally, it mandates disclosure of agreements with foreign interests within 14 days, although financing terms can remain confidential. If passed, the law would take effect on July 1, 2026.
Why It's Important?
The proposed legislation is significant as it addresses concerns about the impact of third-party litigation funding on Florida's economy and legal system. By curbing the influence of external financiers, the bills aim to protect the state's legal integrity and reduce unnecessary litigation costs. This move could benefit businesses and insurers by potentially lowering the frequency and cost of lawsuits. However, it may also face opposition from those who argue that litigation funding provides access to justice for individuals who might otherwise be unable to afford legal representation. The outcome of this legislative effort could set a precedent for other states considering similar measures.
What's Next?
The bills are expected to face a challenging path in the Florida House, where there is less enthusiasm for additional tort reform. If the legislation passes, Florida would join at least eight other states with similar restrictions on litigation funding. The outcome could influence ongoing discussions in other states, such as Washington and Alabama, where lawmakers are considering similar regulations. The response from legal and business communities will be crucial in shaping the future of litigation funding in Florida and potentially across the United States.
