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HD 3749

An Act providing transparency in third party litigation financing

194th Legislature (2025-2026) Introduced by Adrian Madaro

Requires parties in civil lawsuits to disclose third-party litigation financing arrangements to courts and opponents, increasing visibility of an opaque funding practice.

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Bill Summary · HD 3749

Legislative bill overview

HD 3749 requires disclosure of third-party litigation financing agreements in civil lawsuits, mandating that parties receiving funding from litigation finance companies reveal the existence, terms, and identity of funders to courts and opposing parties. The bill aims to bring transparency to an increasingly common practice where non-parties fund litigation in exchange for a percentage of any settlement or judgment.

Why is this important

Third-party litigation financing has grown substantially, allowing plaintiffs to pursue cases they couldn't otherwise afford while enabling financiers to profit from legal outcomes. However, the practice operates largely in shadow, raising concerns about conflicts of interest, potential distortion of settlement negotiations, and whether funders might influence litigation strategy or encourage excessive claims. Transparency requirements help courts and defendants understand financial incentives that may be driving cases.

Potential points of contention

  • Plaintiff access to justice: Requiring disclosure could discourage litigation financiers from backing cases, potentially limiting access to justice for those who cannot afford to litigate independently
  • Competitive disadvantage concerns: Plaintiffs argue disclosure gives defendants unfair leverage in negotiations by revealing financial desperation or the funder's profit threshold
  • Scope and enforceability: Unclear whether disclosure requirements apply equally to all case types or only certain disputes, and what penalties apply for non-compliance

Compiled from official sources — confirm details with the bill’s official record.

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