A new bill introduced in the Florida House of Representatives aims to put limits on how third-party litigation financing works and to bring more transparency to these deals. House Bill 1157, brought forward by Republican Representative Fabian Basabe from District 106, seeks to regulate agreements where outside investors fund lawsuits in exchange for a cut of any settlement or judgment.
This isn’t Florida’s first attempt to deal with this issue. Similar efforts in the past, including House Bill 1179 and Senate Bill 1276, didn’t make it through the state House. Now, HB 1157 brings fresh rules that require courts to check if these funding deals could affect lawyers’ ability to fairly represent their clients. The bill is focused on preventing conflicts of interest that can happen when outside parties bankroll a case.
Under the proposed rules, funders won’t be allowed to control how a lawsuit is run. They can’t pick the lawyers, hire expert witnesses, or make any decisions about the legal strategy. The bill also puts a cap on how much money these funders can make—they can’t earn more than the plaintiffs receive in settlements. Plus, paying commissions or referral fees is off the table.
The bill also pays special attention to cases involving foreign entities. If a litigation financing deal includes a foreign person or company, that must be disclosed to the court and all parties involved.
Florida isn’t alone in trying to regulate this area. The Washington Legislature is looking at House Bill 2255, which would require similar registration and disclosure rules, set caps on interest rates, and restrict funders’ influence over legal matters. Like Florida’s bill, Washington’s measure would stop financiers from paying referral fees to attorneys and demand full transparency about funding agreements.
Third-party litigation funding has grown as a way to help plaintiffs or law firms cover the costs of lawsuits, but it has raised concerns about whether outside money could sway legal decisions. This new wave of legislation shows a growing push to keep these financial arrangements fair and open.