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HB 312

LITIGATION FINANCING TRANSPARENCY ACT

2025 Regular Session Introduced by Alan Martinez and 1 co-sponsor

New Mexico bill requiring third-party litigation financiers to disclose funding terms to courts and opposing parties, increasing transparency but potentially affecting plaintiff access to capital for lawsuits.

action postponed indefinitely
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Bill Summary · HB 312

Legislative bill overview

HB 312 requires litigation financing companies to disclose their funding arrangements, terms, and financial agreements to courts and opposing parties in civil lawsuits. The bill aims to increase transparency around third-party litigation funding—a growing practice where outside investors finance legal cases in exchange for a percentage of settlements or judgments.

Why is this important

Litigation financing has expanded significantly but operates largely behind closed doors, potentially affecting settlement negotiations, case strategy, and access to justice. Transparency requirements could help courts and defendants understand whether a plaintiff's litigation decisions are driven by legitimate claims or investor profit motives, while advocates argue it may deter frivolous lawsuits funded by speculative investors.

Potential points of contention

  • Access to justice concerns: Plaintiffs' attorneys argue that disclosure requirements could chill litigation financing availability, particularly harming low-income plaintiffs who lack resources for costly litigation
  • Competitiveness and settlement leverage: Defendants may gain negotiating advantages if they know about investors' profit expectations and pressure points, potentially forcing lower settlements
  • Privacy and competitive secrets: Litigation finance companies argue that detailed disclosures of their business terms and return expectations constitute proprietary information and create competitive disadvantages

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

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