Substitute for SENATE BILL No. 54
AN ACT concerning the code of civil procedure; relating to litigation funding by third
parties; limiting discovery and disclosure of third-party litigation funding
agreements; requiring reporting of such agreements to the court; amending K.S.A.
2024 Supp. 60-226 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2024 Supp. 60-226 is hereby amended to read as
follows: 60-226. (a) Discovery methods. Parties may obtain discovery
by one or more of the following methods: Depositions on oral
examination or written questions; written interrogatories; production of
documents or things or permission to enter onto land or other property
under K.S.A. 60-234, K.S.A. 60-245(a)(1)(A)(iii) or K.S.A. 60-245a,
and amendments thereto; physical and mental examinations; and
requests for admission.
(b) Discovery scope and limits. (1) Scope in general. Unless
otherwise limited by court order, the scope of discovery is as follows:
Parties may obtain discovery regarding any nonprivileged matter that is
relevant to any party's claim or defense and proportional to the needs of
the case, considering the importance of the issues at stake in the action,
the amount in controversy, the parties' relative access to relevant
information, the parties' resources, the importance of the discovery in
resolving the issues and whether the burden or expense of the proposed
discovery outweighs its likely benefit. Information within this scope of
discovery need not be admissible in evidence to be discoverable.
(2) Limitations on frequency and extent. (A) On motion, or on its
own, the court may limit the frequency or extent of discovery methods
otherwise allowed by the rules of civil procedure and must do so if it
determines that:
(i) The discovery sought is unreasonably cumulative or
duplicative, or can be obtained from some other source that is more
convenient, less burdensome or less expensive;
(ii) the party seeking discovery has had ample opportunity to
obtain the information by discovery in the action; or
(iii) the proposed discovery is outside the scope permitted by
subsection (b)(1).
(B) A party need not provide discovery of electronically stored
information from sources that the party identifies as not reasonably
accessible because of undue burden or cost. On motion to compel
discovery or for a protective order, the party from whom discovery is
sought must show that the information is not reasonably accessible
because of undue burden or cost. If that showing is made, the court
may nonetheless order discovery from such sources if the requesting
party shows good cause, considering the limitations of subsection (b)
(2)(A). The court may specify conditions for the discovery.
(3) Agreements. (A) Insurance agreements. A party may obtain
discovery of the existence and contents of any insurance agreement
under which an insurance business may be liable to satisfy part or all of
a possible judgment in the action or to indemnify or reimburse for
payments made to satisfy the judgment. Information concerning the
insurance agreement is not by reason of disclosure admissible in
evidence at trial. For purposes of this paragraph, an application for
insurance is not a part of an insurance agreement.
(B) (i) Third-party litigation funding agreements. (a) A party shall
provide to the court, for in camera review, any third-party litigation
funding agreement within 30 days after commencement of a legal
action or 30 days after execution of a third-party litigation funding
agreement, whichever is later.
(b) Except as otherwise stipulated by the parties or ordered by the
court, if a party has entered into a third-party litigation funding
agreement, such party shall deliver to all other parties, within 30 days Substitute for SENATE BILL No. 54—page 2
after commencement of a legal action or 30 days after execution of
such third-party litigation funding agreement, whichever is later, a
sworn statement disclosing:
(1) The identity of all contracting parties to the third-party
litigation funding agreement, including the name, address and, if a
party is a legal entity, the place of formation of such entity;
(2) whether the agreement grants a third-party funder control or
approval rights with respect to litigation or settlement decisions or
otherwise has the potential to create conflicts of interest between the
third-party funder and the party and, if the agreement does grant such
control or approval rights, the nature of the terms and conditions
relating to such control or approval rights;
(3) whether the agreement grants a third-party funder the right to
receive materials designated as confidential pursuant to a protective or
confidentiality agreement or order in the action;
(4) the existence of any known relationship between a third-party
funder and the adverse party, the adverse party's counsel or the court;
(5) a description of the nature of the financial interest, including,
but not limited to, whether such interest is, in whole or in part,
recourse or non-recourse; and
(6) whether any foreign person from a foreign country of concern
is providing funding, directly or indirectly, for the third-party litigation
funding agreement and, if so, the name, address and country of
incorporation or registration of the foreign person.
(ii) Limitations on discovery of third-party litigation funding
agreements. (a) Information concerning the third-party litigation
funding agreement is not by reason of disclosure admissible in
evidence at trial.
(b) Subsection (b)(3)(B)(i) shall not be construed to require a
nonprofit corporation or association to disclose its members or donors.
(c) Except as provided in subsection (b)(3)(B)(i), the provisions of
this section shall not be construed to modify the applicability of articles
2 or 4 of chapter 60 of the Kansas Statutes Annotated, and amendments
thereto.
(4) Trial preparation; materials. (A) Documents and tangible
things. Ordinarily, a party may not discover documents and tangible
things that are prepared in anticipation of litigation or for trial by or for
another party or its representative, including the other party's attorney,
consultant, surety, indemnitor, insurer or agent. But, subject to
subsection (b)(5), those materials may be discovered if:
(i) They are otherwise discoverable under paragraph (1); and
(ii) the party shows that it has substantial need for the materials to
prepare its case and cannot, without undue hardship, obtain their
substantial equivalent by other means.
(B) Protection against disclosure. If the court orders discovery of
those materials, it must protect against disclosure of the mental
impressions, conclusions, opinions or legal theories of a party's
attorney or other representative concerning the litigation.
(C) Previous statement. Any party or other person may, on request
and without the required showing, obtain the person's own previous
statement about the action or its subject matter. If the request is refused,
the person may move for a court order, and K.S.A. 60-237, and
amendments thereto, applies to the award of expenses. A previous
statement is either:
(i) A written statement that the person has signed or otherwise
adopted or approved; or
(ii) a contemporaneous stenographic, mechanical, electrical or
other recording, or a transcription of it, that recites substantially
verbatim the person's oral statement. Substitute for SENATE BILL No. 54—page 3
(5) Trial preparation; experts.
(A) Deposition of an expert who may testify. A party may depose
any person who has been identified as an expert whose opinions may
be presented at trial. If a disclosure is required under subsection (b)(6),
the deposition may be conducted only after the disclosure is provided.
(B) Trial-preparation protection for draft disclosures. Subsections
(b)(4)(A) and (b)(4)(B) protect drafts of any disclosure required under
subsection (b)(6), and drafts of a disclosure by an expert witness
provided in lieu of the disclosure required by subsection (b)(6),
regardless of the form in which the draft is recorded.
(C) Trial-preparation protection for communications between a
party's attorney and expert witnesses. Subsections (b)(4)(A) and (b)(4)
(B) protect communications between the party's attorney and any
witness about whom disclosure is required under subsection (b)(6),
regardless of the form of the communications, except to the extent that
the communications:
(i) Relate to compensation for the expert's study or testimony;
(ii) identify facts or data that the party's attorney provided and that
the expert considered in forming the opinions to be expressed; or
(iii) identify assumptions that the party's attorney provided and
that the expert relied on in forming the opinions to be expressed.
(D) Expert employed only for trial preparation. Ordinarily, a party
may not, by interrogatories or deposition, discover facts known or
opinions held by an expert who has been retained or specially
employed by another party in anticipation of litigation or to prepare for
trial and who is not expected to be called as a witness at trial. But a
party may do so only:
(i) As provided in K.S.A. 60-235(b), and amendments thereto; or
(ii) on showing exceptional circumstances under which it is
impracticable for the party to obtain facts or opinions on the same
subject by other means.
(E) Payment. Unless manifest injustice would result, the court
must require that the party seeking discovery:
(i) Pay the expert a reasonable fee for time spent in responding to
discovery under subsection (b)(5)(A) or (b)(5)(D); and
(ii) for discovery under subsection (b)(5)(D), also pay the other
party a fair portion of the fees and expenses it reasonably incurred in
obtaining the expert's facts and opinions.
(6) Disclosure of expert testimony. (A) Required disclosures. A
party must disclose to other parties the identity of any witness it may
use at trial to present expert testimony. The disclosure must state:
(i) The subject matter on which the expert is expected to testify;
and
(ii) the substance of the facts and opinions to which the expert is
expected to testify.
(B) Witness who is retained or specially employed. Unless
otherwise stipulated or ordered by the court, if the witness is retained or
specially employed to provide expert testimony in the case, or is one
whose duties as the party's employee regularly involve giving expert
testimony, the disclosure under subsection (b)(6)(A) must also state a
summary of the grounds for each opinion.
(C) Time to disclose expert testimony. A party must make these
disclosures at the times and in the sequence that the court orders.
Absent a stipulation or court order, the disclosures must be made:
(i) At least 90 days before the date set for trial or for the case to be
ready for trial; or
(ii) if the evidence is intended solely to contradict or rebut
evidence on the same subject matter identified by another party under
subsection (b)(6)(B), within 30 days after the other party's disclosure. Substitute for SENATE BILL No. 54—page 4
(D) Supplementing the disclosure. The parties must supplement
these disclosures when required under subsection (e).
(E) Form of disclosures. Unless otherwise ordered by the court, all
disclosures under this subsection must be:
(i) In writing, signed and served; and
(ii) filed with the court in accordance with K.S.A. 60-205(d), and
amendments thereto.
(7) Claiming privilege or protecting trial preparation materials.
(A) Information withheld. When a party withholds information
otherwise discoverable by claiming that the information is privileged or
subject to protection as trial preparation material, the party must:
(i) Expressly make the claim; and
(ii) describe the nature of the documents, communications or
things not produced or disclosed, and do so in a manner that, without
revealing information itself privileged or protected, will enable other
parties to assess the claim.
(B) Information produced. If information produced in discovery is
subject to a claim of privilege or of protection as trial preparation
material, the party making the claim may notify any party that received
the information of the claim and the basis for it. After being notified, a
party must promptly return, sequester or destroy the specified
information and any copies it has; must not use or disclose the
information until the claim is resolved; must take reasonable steps to
retrieve the information if the party disclosed it before being notified;
and may promptly present the information to the court under seal for a
determination of the claim. The producing party must preserve the
information until the claim is resolved.
(c) Protective orders. (1) In general. A party or any person from
whom discovery is sought may move for a protective order in the court
where the action is pending, as an alternative on matters relating to a
deposition, in the district court where the deposition will be taken. The
motion must include a certification that the movant has in good faith
conferred or attempted to confer with other affected parties in an effort
to resolve the dispute without court action and must describe the steps
taken by all attorneys or unrepresented parties to resolve the issues in
dispute. The court may, for good cause, issue an order to protect a party
or person from annoyance, embarrassment, oppression or undue burden
or expense, including one or more of the following:
(A) Forbidding the disclosure or discovery;
(B) specifying terms, including time and place or the allocation of
expenses, for the disclosure or discovery;
(C) prescribing a discovery method other than the one selected by
the party seeking discovery;
(D) forbidding inquiry into certain matters, or limiting the scope
of disclosure or discovery to certain matters;
(E) designating the persons who may be present while the
discovery is conducted;
(F) requiring that a deposition be sealed and opened only on court
order;
(G) requiring that a trade secret or other confidential research,
development or commercial information not be revealed or be revealed
only in a specified way; and
(H) requiring that the parties simultaneously file specified
documents or information in sealed envelopes, to be opened as the
court orders.
(2) Ordering discovery. If a motion for a protective order is wholly
or partly denied the court may, on just terms, order that any party or
person provide or permit discovery.
(3) Awarding expenses. The provisions of K.S.A. 60-237, and Substitute for SENATE BILL No. 54—page 5
amendments thereto, apply to the award of expenses.
(d) Sequence of discovery. Unless the parties stipulate or the court
orders otherwise for the parties' and witnesses' convenience and in the
interests of justice:
(1) Methods of discovery may be used in any sequence; and
(2) discovery by one party does not require any other party to
delay its discovery.
(e) Supplementing disclosures and responses. (1) In general. A
party who has made a disclosure under subsection (b)(6), or who has
responded to an interrogatory, request for production or request for
admission, must supplement or correct its disclosure or response:
(A) In a timely manner if the party learns that in some material
respect the disclosure or response is incomplete or incorrect, and if the
additional or corrective information has not otherwise been made
known to the other parties during the discovery process or in writing; or
(B) as ordered by the court.
(2) Expert witness. For an expert to whom the disclosure
requirement in subsection (b)(6) applies, the party's duty to supplement
extends both to information included in the disclosure and to
information given during the expert's deposition. Any additions or
changes to this information must be disclosed at least 30 days before
trial, unless the court orders otherwise.
(f) Signing disclosures and discovery requests, responses and
objections. (1) Signature required; effect of signature. Every disclosure
under subsection (b)(6) and every discovery request, response or
objection must be signed by at least one attorney of record in the
attorney's own name, or by the party personally, if unrepresented, and
must state the signor's address, e-mail address and telephone number.
By signing, an attorney or party certifies that to the best of the person's
knowledge, information and belief formed after a reasonable inquiry:
(A) With respect to a disclosure, it is complete and correct as of
the time it is made;
(B) with respect to a discovery request, response or objection, it is:
(i) Consistent with the rules of civil procedure and warranted by
existing law or by a nonfrivolous argument for extending, modifying or
reversing existing law or for establishing new law;
(ii) not interposed for any improper purpose, such as to harass,
cause unnecessary delay or needlessly increase the cost of litigation;
and
(iii) neither unreasonable nor unduly burdensome or expensive
considering the needs of the case, prior discovery in the case, the
amount in controversy and the importance of the issues at stake in the
action.
(2) Failure to sign. Other parties have no duty to act on an
unsigned disclosure, request, response or objection until it is signed,
and the court must strike it unless a signature is promptly supplied after
the omission is called to the attorney's or party's attention.
(3) Sanction for improper certification. If a certification violates
this section without substantial justification, the court, on motion, or on
its own, must impose an appropriate sanction on the signer, the party on
whose behalf the signer was acting, or both. The sanction may include
an order to pay the reasonable expenses, including attorney's fees,
caused by the violation.
(g) Definitions. As used in this section:
(1) "Foreign country of concern" means any foreign adversary as
such term is defined by 15 C.F.R. § 7.4, as in effect on July 1, 2025,
and any organization that is designated as a foreign terrorist
organization as of July 1, 2025, pursuant to 8 U.S.C. § 1189, as in
effect on July 1, 2025. Substitute for SENATE BILL No. 54—page 6
(2) "Foreign person" means:
(A) An individual that is not a citizen of the United States or an
alien lawfully admitted for permanent residence in the United States;
(B) an unincorporated association when a majority of the
members are not citizens of the United States or aliens lawfully
admitted for permanent residence in the United States;
(C) a corporation that is not incorporated in the United States;
(D) a government, political subdivision or political party of a
country other than the United States;
(E) an entity that is organized under the laws of a county other
than the United States;
(F) an entity that has a principal place of business in a country
other than the United States and has shares or other ownership interest
held by the government or a government official of a country other
than the United States; or
(G) an organization in which any person or entity described in
subsections (g)(2)(A) through (g)(2)(F) holds a controlling or majority
interest or in which the holdings of any such persons or entities,
considered together, would constitute a controlling majority interest.
(3) "Reasonable interest" means a total interest not greater than
11.1% of the principal.
(4) "Third-party litigation funding agreement" means any
agreement under which any person, other than a party, an attorney
representing the party, such attorney's firm or a member of the family
or household of a party has agreed to pay expenses directly related to
prosecuting the legal claim and has a contractual right to receive
compensation that is contingent in any respect on the outcome of the
claim. "Third-party litigation funding agreement" does not include an
agreement that does not afford the nonparty agreeing to pay legal
expenses any profit from the legal claim beyond repayment of the
amount such nonparty has contractually agreed to provide plus
reasonable interest.
(h) The provisions of subsection (b)(3)(B) are severable. If any
portion of such subsection is held by a court to be unconstitutional or
invalid, or the application of any portion of such subsection to any
person or circumstance is held by a court to be unconstitutional or
invalid, the invalidity shall not affect the other portions of such
subsection that can be given effect without the invalid portion or
application, and the applicability of such other portions of such
subsection to any person or circumstance remains valid and
enforceable.
Sec. 2. K.S.A. 2024 Supp. 60-226 is hereby repealed. Substitute for SENATE BILL No. 54—page 7
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
I hereby certify that the above BILL originated in the
SENATE, and passed that body
__________________________
SENATE concurred in
HOUSE amendments _______________________
_________________________
President of the Senate.
_________________________
Secretary of the Senate.
Passed the HOUSE
as amended _________________________
_________________________
Speaker of the House.
_________________________
Chief Clerk of the House.
APPROVED _____________________________
_________________________
Governor.