Georgia Enacts New Legislation for Third-Party Lawsuit Funding

Georgia’s lawmakers have just passed a meaningful bill aimed at shedding light on who funds lawsuits.

This new law, which received approval from both the House and senate on March 27, requires outside financial backers of lawsuits to officially register with state authorities. It also prohibits these groups from pressuring plaintiffs regarding settlement decisions and bans foreign governments from funding legal actions within Georgia.

The state’s Republican Governor Brian Kemp is anticipated to sign this bill into law shortly.

The National Federation of Autonomous Business’s State Director Hunter Loggins praised this move for enhancing oversight over third-party litigation funding.

“this practice frequently enough feels more like intimidation than justice,” Loggins remarked. “While SB 69 won’t prevent anyone from pursuing their case in court, it ensures juries are aware of who’s backing the lawsuit, promoting fairness for all parties involved.”

The Georgia Motor Trucking Association echoed similar sentiments, calling this legislation a step toward equity in the legal landscape. “SB 69 brings necessary regulation to third-party financing that safeguards both businesses and consumers,” they stated.

“In recent years, we’ve seen an explosion in litigation financing,” noted David Bauer from American Trucking Associations. “Many cases that might have been settled amicably are now heading to trial—often leaving plaintiffs worse off than before.”

bauer highlighted alarming interest rates associated with these arrangements—sometimes as high as 60%. “When you break it down,” he explained, “that means a hefty chunk goes to hedge funds while only a fraction reaches those who were wronged.”

Bauer emphasized that juries should be informed when outside investors hold stakes in civil suits seeking damages so defendants can present these facts during trials.