First Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED
LLS NO. 25-1033.01 Chelsea Princell x4335
HOUSE BILL 25-1329
House Committees Senate Committees
Judiciary
A BILL FOR AN ACT
C
ONCERNING FOREIGN THIRD -PARTY LITIGATION FINANCING FOR101
CIVIL ACTIONS.102
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov
.)
The bill requires a foreign third-party funder that enters into a
litigation financing agreement to disclose and submit certain information
to the Colorado attorney general.
The bill prohibits a foreign third-party funder from taking part in
certain activities.
The bill subjects a litigation financing agreement to discovery
HOUSE SPONSORSHIP
Mabrey and Soper,
SENATE SPONSORSHIP
Frizell and Gonzales J.,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law. under the Colorado rules of civil procedure and Colorado rules of
evidence.
The bill deems a litigation financing agreement entered into by a
foreign third-party litigation funder void if the foreign third-party
litigation funder fails to comply with the activity and disclosure
requirements.
The bill allows the attorney general to bring legal action against a
foreign third-party litigation funder to enforce compliance with the bill,
impose fines, prohibit a foreign third-party litigation funder from
operating in this state, or impose any other sanction the attorney general
deems appropriate for a violation of the activity or disclosure
requirements.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, add 13-16-126 as2
follows:3
13-16-126. Transparency and limitations on third-party4
litigation funding - unfair or deceptive trade practices - enforcement5
- report - definitions. (1) A
S USED IN THIS SECTION, UNLESS THE6
CONTEXT OTHERWISE REQUIRES :7
(a) "A
TTORNEY" MEANS AN ATTORNEY, GROUP OF ATTORNEYS, OR8
LAW FIRM THAT REPRESENTS A PARTY IN A CIVIL ACTION IN THIS STATE .9
(b) "F
OREIGN COUNTRY OF CONCERN " MEANS A FOREIGN10
GOVERNMENT LISTED IN 15 CFR 7.4 AND INCLUDES AN AGENCY OF , OR11
ANY OTHER ENTITY WITH SIGNIFICANT CONTROL OF , THE FOREIGN12
COUNTRY OF CONCERN.13
(c) "F
OREIGN ENTITY" MEANS AN ENTITY THAT IS EITHER OWNED14
OR CONTROLLED BY THE GOVERNMENT OF A FOREIGN COUNTRY OF15
CONCERN OR A PARTNERSHIP , ASSOCIATION, CORPORATION, OR16
ORGANIZATION UNDER THE LAW OF , OR HAVING ITS PRINCIPAL PLACE OF17
BUSINESS IN, A FOREIGN COUNTRY OF CONCERN OR A SUBSIDIARY18
THEREOF.19
HB25-1329-2- (d) "FOREIGN THIRD-PARTY LITIGATION FUNDER " MEANS A1
FOREIGN ENTITY THAT IS A THIRD-PARTY LITIGATION FUNDER.2
(e) "L
ITIGATION EXPENSES" MEANS COSTS TYPICALLY INCURRED3
IN THE COURSE OF CIVIL LITIGATION, INCLUDING FILING FEES, EXPERT4
WITNESS FEES, TRANSCRIPT FEES, COURT COSTS, TRAVEL EXPENSES, AND5
OFFICE OVERHEAD. "LITIGATION EXPENSES" DOES NOT INCLUDE FUNDS6
INTENDED FOR USE BY A PARTY FOR PERSONAL OR FAMILIAL EXPENSES7
SUCH AS FOOD, RENT, MORTGAGE PAYMENTS, CAR PAYMENTS, OR MEDICAL8
BILLS.9
(f) "L
ITIGATION FINANCING" MEANS THE FINANCING, FUNDING,10
ADVANCING, OR LENDING OF MONEY TO PAY FOR LITIGATION EXPENSES OR11
AN AGREEMENT TO PAY LITIGATION EXPENSES DIRECTLY RELATED TO12
PURSUING A LEGAL CLAIM, ADMINISTRATIVE PROCEEDING, OR CAUSE OF13
ACTION IF THE FINANCING, FUNDING, ADVANCING, OR LENDING OF MONEY14
IS PROVIDED BY A PERSON OTHER THAN THE PERSON WHO IS :15
(I) A
PARTY TO THE CIVIL ACTION, ADMINISTRATIVE PROCEEDING,16
CLAIM, OR CAUSE OF ACTION;17
(II) A
N ATTORNEY ENGAGED DIRECTLY OR INDIRECTLY THROUGH18
ANOTHER LEGAL REPRESENTATIVE TO REPRESENT A PARTY IN THE CIVIL19
ACTION; OR20
(III) A
N ENTITY OR INSURER WITH A PREEXISTING CONTRACTUAL21
OBLIGATION TO INDEMNIFY OR DEFEND A PARTY TO THE CIVIL ACTION .22
(g) "L
ITIGATION FINANCING AGREEMENT " MEANS A TRANSACTION23
THAT PROVIDES LITIGATION FINANCING TO A PARTY OR A PARTY 'S24
ATTORNEY IN RETURN FOR ASSIGNING THE THIRD -PARTY LITIGATION25
FUNDER A RIGHT TO RECEIVE AN AMOUNT THAT INCLUDES THE PAYMENT26
OF INTEREST, FEES, OR ANY OTHER CONSIDERATION CONTINGENT ON THE27
HB25-1329
-3- OUTCOME OF THE CLAIM OR ACTION . "LITIGATION FINANCING1
AGREEMENT" DOES NOT INCLUDE:2
(I) L
EGAL SERVICES PROVIDED TO A PARTY BY AN ATTORNEY ON3
A CONTINGENCY FEE BASIS OR LEGAL COSTS ADVANCED BY AN ATTORNEY4
WHEN THE SERVICES OR COSTS ARE PROVIDED TO OR ON BEHALF OF A5
PARTY BY AN ATTORNEY IN THE DISPUTE AND IN ACCORDANCE WITH THE6
RULES OF PROFESSIONAL CONDUCT ;7
(II) B
ILLS, RECEIVABLES, OR LIENS HELD BY A HEALTH -CARE8
PROVIDER OR THEIR ASSIGNEE;9
(III) L
OANS MADE DIRECTLY TO A PARTY OR A PARTY 'S ATTORNEY10
WHEN REPAYMENT OF THE LOAN IS NOT CONTINGENT UPON THE11
JUDGMENT, AWARD, SETTLEMENT, OR VERDICT IN A CLAIM OR ACTION; OR12
(IV) F
UNDING PROVIDED BY A NONPROFIT ORGANIZATION EXEMPT13
FROM FEDERAL INCOME TAXATION UNDER SECTION 501(c)(3) OF THE14
FEDERAL "INTERNAL REVENUE CODE OF 1986".15
(h) "N
ATIONAL SECURITY INTEREST" MEANS INTERESTS RELATING16
TO THE NATIONAL DEFENSE , FOREIGN INTELLIGENCE AND17
COUNTERINTELLIGENCE, INTERNATIONAL AND DOMESTIC SECURITY , AND18
FOREIGN RELATIONS.19
(i) "P
ARTY" MEANS A PERSON OR ENTITY IN A CIVIL ACTION.20
(j) "P
ROPRIETARY INFORMATION " MEANS INFORMATION21
DEVELOPED, CREATED, OR DISCOVERED BY A PERSON, OR THAT BECAME22
KNOWN BY OR WAS CONVEYED TO THE PERSON , THAT HAS A COMMERCIAL23
VALUE IN THE PERSON'S BUSINESS AND INCLUDES DOMAIN NAMES , TRADE24
SECRETS, COPYRIGHTS, IDEAS, TECHNIQUES, INVENTIONS, AND OTHER25
INFORMATION RELATING TO DESIGNS, CONFIGURATIONS, DOCUMENTATION,26
RECORDED DATA, SCHEMATICS, CIRCUITS, MASK WORKS, LAYOUTS,27
HB25-1329
-4- SOURCE CODE, OBJECT CODE, MASTER WORKS, MASTER DATABASES ,1
ALGORITHMS, FLOW CHARTS, FORMULAS, WORKS OF AUTHORSHIP ,2
MECHANISMS, RESEARCH, MANUFACTURE, IMPROVEMENTS, ASSEMBLY,3
INSTALLATION, INTELLECTUAL PROPERTY INCLUDING PATENTS AND4
PATENT APPLICATIONS, AND INFORMATION CONCERNING A PERSON 'S5
ACTUAL OR ANTICIPATED BUSINESS, RESEARCH, OR DEVELOPMENT.6
(k) "T
HIRD-PARTY LITIGATION FUNDER" MEANS A PERSON OR7
ENTITY THAT PROVIDES LITIGATION FINANCING TO A PARTY OR ATTORNEY8
IN A CIVIL ACTION AND HAS THE CONTRACTUAL RIGHT TO RECEIVE OR9
MAKE A PAYMENT THAT IS CONTINGENT ON THE OUTCOME OF AN10
IDENTIFIED CIVIL ACTION BY SETTLEMENT, JUDGMENT, OR OTHERWISE ON11
THE OUTCOME OF A MATTER WITHIN A PORTFOLIO THAT INCLUDES THE12
CIVIL ACTION . THIS TERM DOES NOT APPLY TO:13
(I) T
HE NAMED PARTIES OR ATTORNEYS WHO PROVIDE FUNDING14
FOR LITIGATION EXPENSES RELATED TO THE CIVIL ACTION ;15
(II) A
PERSON OR ENTITY PROVIDING FUNDING SOLELY INTENDED16
TO PAY COSTS OF LIVING OR OTHER PERSONAL OR FAMILIAL EXPENSES17
DURING THE PENDENCY OF THE CIVIL ACTION ;18
(III) T
HE NAMED PARTIES OR ATTORNEYS WHO PROVIDE FUNDING ,19
INCLUDING ON A CONTINGENCY FEE BASIS OR TO ADVANCE THE NAMED20
PARTIES' LEGAL EXPENSES RELATED TO THE CIVIL ACTION ;21
(IV) A
HEALTH INSURER, MEDICAL PROVIDER, OR ASSIGNEE THAT22
HAS PAID, IS OBLIGATED TO PAY, OR IS OWED MONEY FOR HEALTH -CARE23
SERVICES RENDERED TO AN INJURED PERSON WHO IS A PARTY TO THE CIVIL24
ACTION PURSUANT TO THE TERMS OF A HEALTH INSURANCE PLAN OR25
OTHER AGREEMENT;26
(V) A
FINANCIAL INSTITUTION PROVIDING LOANS MADE DIRECTLY27
HB25-1329
-5- TO A PARTY OR ATTORNEY WHEN REPAYMENT OF THE LOAN IS NOT1
CONTINGENT UPON THE OUTCOME OF THE CIVIL ACTION OR ON THE2
OUTCOME OF A MATTER WITHIN A PORTFOLIO THAT INCLUDES THE CIVIL3
ACTION AND INVOLVES THE SAME ATTORNEY ; OR4
(VI) A
NONPROFIT LEGAL ORGANIZATION EXEMPT FROM FEDERAL5
INCOME TAXATION UNDER SECTION 501(c)(3) OF THE FEDERAL "INTERNAL6
R
EVENUE CODE OF 1986", OR A PERSON PROVIDING FUNDING TO A7
NONPROFIT LEGAL ORGANIZATION THAT REPRESENTS CLIENTS ON A PRO8
BONO BASIS. THIS SUBSECTION (1)(k)(VI) DOES NOT AFFECT THE AWARD9
OF COSTS OR ATTORNEY FEES TO A NONPROFIT LEGAL ORGANIZATION OR10
RELATED ATTORNEY.11
(2) A
FOREIGN THIRD-PARTY LITIGATION FUNDER SHALL:12
(a) D
ISCLOSE IN WRITING TO THE ATTORNEY GENERAL THE NAME ,13
ADDRESS, AND CITIZENSHIP OR COUNTRY OF INCORPORATION OR14
REGISTRATION OF THE FOREIGN ENTITY THAT HAS A FINANCIAL STAKE IN15
THE OUTCOME OF THE CIVIL ACTION OR PORTFOLIO THAT INCLUDES THE16
CIVIL ACTION; AND17
(b) S
UBMIT TO THE ATTORNEY GENERAL A COPY OF THE18
LITIGATION FINANCING AGREEMENT CREATING THE CONTINGENT RIGHT TO19
RECEIVE PAYMENT DESCRIBED IN SUBSECTION (2)(a) OF THIS SECTION.20
(3) T
HE DISCLOSURE AND CERTIFICATION REQUIRED BY21
SUBSECTION (2) OF THIS SECTION MUST BE MADE UPON FILING THE CIVIL22
ACTION OR, IF THE CIVIL ACTION IS FILED PRIOR TO THE EXECUTION OF A23
LITIGATION FINANCING AGREEMENT, WITHIN THIRTY-FIVE DAYS AFTER THE24
EXECUTION OF THE LITIGATION FINANCING AGREEMENT .25
(4) T
HE DECLARANT SHALL MAKE THE DISCLOSURE AND26
CERTIFICATION REQUIRED BY SUBSECTION (2) OF THIS SECTION UNDER27
HB25-1329
-6- PENALTY OF PERJURY BASED ON ACTUAL KNOWLEDGE OF THE DECLARANT1
FORMED AFTER REASONABLE INQUIRY . THE FOREIGN THIRD-PARTY2
LITIGATION FUNDER SHALL PROVIDE THE DISCLOSURE AND CERTIFICATION3
TO THE ATTORNEY GENERAL , AND THE ATTORNEY GENERAL SHALL4
MAINTAIN THE DISCLOSURE TO PRESERVE THE CONFIDENTIALITY OF THE5
PARTIES AND ATTORNEYS.6
(5) I
F, AFTER SUBMITTING THE DISCLOSURE AND CERTIFICATION7
REQUIRED BY SUBSECTION (2) OF THIS SECTION , THE FOREIGN8
THIRD-PARTY LITIGATION FUNDER LEARNS THAT THE INFORMATION9
DISCLOSED IS INCOMPLETE OR INACCURATE , THE FOREIGN THIRD-PARTY10
LITIGATION FUNDER MUST SUPPLEMENT OR CORRECT THE INCOMPLETE OR11
INACCURATE DISCLOSURE OR CERTIFICATION WITHIN THIRTY -FIVE DAYS12
AFTER LEARNING OF THE INCOMPLETE OR INACCURATE INFORMATION .13
(6) A
FOREIGN THIRD-PARTY LITIGATION FUNDER SHALL NOT :14
(a) K
NOWINGLY ENTER INTO A LITIGATION FINANCING AGREEMENT15
IN WHICH THE TERMS OF THE LITIGATION FINANCING AGREEMENT MUST BE16
SATISFIED BY FUNDS DIRECTLY SOURCED , IN WHOLE OR IN PART, FROM A17
FOREIGN ENTITY;18
(b) U
TILIZE A DOMESTIC ENTITY AS A MEANS OF PROVIDING19
LITIGATION FINANCING TO A PARTY OR ATTORNEY IN A CIVIL ACTION ;20
(c) D
ECIDE, INFLUENCE, OR DIRECT AN ATTORNEY WITH RESPECT21
TO THE CONDUCT OF THE CIVIL ACTION OR ANY S ETTLEMENT OR22
RESOLUTION OF THE CIVIL ACTION. THE RIGHT TO DECIDE, INFLUENCE, OR23
DIRECT MATTERS RELATED TO A CASE BELONGS SOLELY TO THE PARTIES24
AND ATTORNEYS.25
(d) B
E ASSIGNED RIGHTS TO PROFITS OTHER THAN THE RIGHT TO26
RECEIVE A SHARE OF THE PROCEEDS AWARDED IN THE CIVIL ACTION AS27
HB25-1329
-7- OUTLINED IN THE LITIGATION FINANCING AGREEMENT ; OR1
(e) S
HARE PROPRIETARY INFORMATION , OR INFORMATION2
AFFECTING NATIONAL SECURITY INTERESTS OBTAINED AS A RESULT OF THE3
LITIGATION FINANCING AGREEMENT FOR THE CIVIL ACTION , WITH ANYONE4
WHO IS NOT A PARTY OR AN ATTORNEY .5
(7) T
HE EXISTENCE AND TERMS OF A LITIGATION FINANCING6
AGREEMENT IS SUBJECT TO DISCOVERY PURSUANT TO THE COLORADO7
RULES OF CIVIL PROCEDURE AND COLORADO RULES OF EVIDENCE IN THE8
CIVIL ACTION TO WHICH THE LITIGATION FINANCING AGREEMENT9
PERTAINS.10
(8) A
LITIGATION FINANCING AGREEMENT THAT DOES NOT COMPLY11
WITH THE REQUIREMENTS OF THIS SECTION IS VOID .12
(9) A
VIOLATION OF THIS SECTION CONSTITUTES A DECEPTIVE OR13
UNFAIR TRADE PRACTICE PURSUANT TO SECTION 6-1-105.14
(10) T
HE ATTORNEY GENERAL MAY INSTITUTE A LEGAL ACTION IN15
A COURT OF COMPETENT JURISDICTION TO ENFORCE COMPLIANCE WITH16
THIS SECTION, IMPOSE FINES, PROHIBIT A FOREIGN THIRD -PARTY17
LITIGATION FUNDER FROM OPERATING WITHIN THIS STATE , OR IMPOSE ANY18
OTHER SANCTION THE ATTORNEY GENERAL DEEMS APPROPRIATE FOR A19
VIOLATION OF THIS SECTION.20
(11) (a) N
OTWITHSTANDING SECTION 24-1-136 (11)(a)(I),21
BEGINNING JANUARY 1, 2026, AND ANNUALLY THEREAFTER , THE22
ATTORNEY GENERAL SHALL SUBMIT A REPORT TO THE PRESIDENT OF THE23
SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES24
DESCRIBING FOREIGN INVOLVEMENT IN LITIGATION FINANCING25
AGREEMENTS IN THE PRECEDING YEAR . THE REPORT MUST INCLUDE:26
(I) T
HE NAME, CITIZENSHIP, OR COUNTRY OF INCORPORATION OR27
HB25-1329
-8- REGISTRATION OF THE FOREIGN ENTITY AND WHETHER THE FOREIGN1
ENTITY PROVIDED FUNDS FOR A PURPOSE OTHER THAN TO DEFRAY2
LITIGATION EXPENSES OR THE FINANCIAL IMPACT OF A NEGATIVE3
JUDGEMENT; AND4
(II) W
HETHER A FOREIGN THIRD -PARTY LITIGATION FUNDER5
VIOLATED THE PROVISIONS OF THIS SECTION , AND IF SO, WHAT THE6
VIOLATIONS WERE AND WHETHER THE ATTORNEY GENERAL TOOK7
ENFORCEMENT ACTION AGAINST THE FOREIGN THIRD -PARTY LITIGATION8
FUNDER.9
(b) T
HE REPORT DESCRIBED IN SUBSECTION (11)(a) OF THIS10
SECTION MUST NOT IDENTIFY THE PARTIES INVOLVED IN A CIVIL ACTION OR11
THE ATTORNEY REPRESENTING THE PARTIES IN THE CIVIL ACTION .12
(12) T
HIS SECTION DOES NOT APPLY TO A NONPROFIT13
ORGANIZATION FUNDED BY PRIVATE DONORS THAT REPRESENTS CLIENTS14
ON A PRO BONO BASIS.15
SECTION 2. In Colorado Revised Statutes, 6-1-105, add (1)(iiii)16
as follows:17
6-1-105. Unfair or deceptive trade practices - definitions.18
(1) A person engages in a deceptive trade practice when, in the course of19
the person's business, vocation, or occupation, the person:20
(iiii) V
IOLATED SECTION 13-16-126.21
SECTION 3. In Colorado Revised Statutes, 24-31-101, amend22
(1)(i)(XXII) and (1)(i)(XXIII); and add (1)(i)(XXIV) as follows:23
24-31-101. Powers and duties of attorney general. (1) The24
attorney general:25
(i) May independently initiate and bring civil and criminal actions26
to enforce state laws, including actions brought pursuant to:27
HB25-1329
-9- (XXII) Part 14 of article 12 of title 38; and1
(XXIII) Section 24-34-806;
AND2
(XXIV) S
ECTION 13-16-126.3
SECTION 4. Act subject to petition - effective date. This act4
takes effect at 12:01 a.m. on the day following the expiration of the5
ninety-day period after final adjournment of the general assembly; except6
that, if a referendum petition is filed pursuant to section 1 (3) of article V7
of the state constitution against this act or an item, section, or part of this8
act within such period, then the act, item, section, or part will not take9
effect unless approved by the people at the general election to be held in10
November 2026 and, in such case, will take effect on the date of the11
official declaration of the vote thereon by the governor.12
HB25-1329
-10-