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HB 25-1329

Foreign Third-Party Litigation Financing

2025 Regular Session Introduced by Jennifer Bacon and 13 co-sponsors

Colorado requires foreign third-party litigation funders tied to specified foreign countries to disclose funding terms to the Attorney General; noncompliant agreements may be void.

Governor Signed
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Bill Summary · HB 25-1329

Summary — HB 25-1329 (Foreign Third‑Party Litigation Financing)

Status: Governor Signed (signed June 3, 2025)
Statute added: Colorado Revised Statutes § 13‑16‑126
Introduced: April 11, 2025 — Governor signed June 3, 2025

Purpose

To increase transparency and impose limits on litigation financing provided by certain foreign entities — specifically those linked to "foreign countries of concern" (as defined by federal regulation 15 CFR 7.4) — for civil actions filed in Colorado, and to give the Colorado Attorney General enforcement authority over noncompliant foreign third‑party funders.

Key provisions

  • Establishes a new statutory framework (13‑16‑126) with definitions and rules governing third‑party litigation financing provided by foreign entities controlled by, owned by, or domiciled in a "foreign country of concern."
  • Definitions:
    • “Foreign country of concern” — a foreign government listed in 15 CFR 7.4 (and agencies or entities with significant control of that government).
    • “Foreign third‑party litigation funder” — a foreign entity that provides litigation financing and has contingent rights to recover based on the outcome of the action or a portfolio that includes the action.
    • “Litigation financing,” “litigation expenses,” “litigation financing agreement,” “proprietary information,” and related terms are defined; several common arrangements are excluded (e.g., attorney contingency fees/cost advances, noncontingent loans, health‑care provider liens, and 501(c)(3) nonprofit funding).
  • Mandatory disclosure to Colorado Attorney General:
    • A foreign third‑party litigation funder must disclose in writing the name, address, and citizenship or country of incorporation/registration of any foreign entity with a financial stake in the outcome, and must submit a copy of the litigation financing agreement to the Attorney General.
    • Timing: disclosure must be made upon filing the civil action, or if the agreement is executed after filing, within 35 days after execution.
    • Disclosure must be made under penalty of perjury and based on actual knowledge after reasonable inquiry.
  • Litigation financing agreements entered into by a foreign third‑party funder are subject to discovery under Colorado civil procedure and evidence rules.
  • Remedies and enforcement:
    • A litigation financing agreement is deemed void if the foreign funder fails to comply with the activity and disclosure requirements.
    • The Attorney General may bring legal action to enforce the statute, seek fines, prohibit the funder from operating in Colorado, or impose other sanctions the AG deems appropriate for violations.

Who is affected

  • Foreign third‑party litigation funders fitting the statutory definition (including entities owned or controlled by governments listed in 15 CFR 7.4).
  • Colorado parties who receive such foreign litigation financing and their attorneys.
  • Courts and litigants in civil cases where foreign litigation funding is involved; such agreements become discoverable and noncompliance can void agreements.

Legislative and procedural history

  • Passed House (April 23 & 25, 2025), passed Senate (May 5–6, 2025), enrolled and sent to Governor May 14, 2025; Governor signed June 3, 2025.
  • Sponsored by Representatives Mabrey and Soper and Senators Frizell and Gonzales J., with multiple cosponsors.

Notes

  • The bill targets foreign funders tied to countries identified in federal regulation 15 CFR 7.4; parties should consult that citation to determine covered countries.
  • The provided excerpt does not include an express effective date; consult the enrolled act or Session Laws for the statute’s effective date and any implementing guidance from the Attorney General’s office.

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

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