RÉSUMÉ DIGEST
SB 196 2023 Regular Session Peacock
Proposed law would have created the Litigation Financing Disclosure and Security
Protection Act.
Proposed law would have provided for definitions of "legal representative", "litigation
financer", "litigation financing", "litigation financing contract or agreement", "national
security", "party", and "proprietary information".
Proposed law would have provided that the party not be domiciled in this state.
Proposed law would have provided that except as otherwise stipulated by the parties or
ordered by the court, a party or his legal representative shall, without awaiting a discovery
request and upon the later of sixty days after the commencement of a civil action or sixty
days after execution of the litigation financing agreement, provide to all litigants, including
the insurer if prior to litigation, any litigation financing contract or agreement under which
anyone, other than a legal representative permitted to charge a contingent fee, has received
or has a right to receive compensation or proceeds that are contingent on and sourced from
any proceeds of the civil action by settlement, judgement, or otherwise.
Proposed law would have provided that except as otherwise stipulated by the parties or
ordered by the court, a party or his legal representative shall without awaiting a discovery
request and upon the later of sixty days after the commencement of a civil action or sixty
days after execution of the litigation financing agreement, provide to all litigants, including
the insurer if prior to litigation, any litigation financing contract or agreement under which
anyone, other than a legal representative permitted to charge a contingent fee, has received
or has a right to receive proprietary information or information affecting national defense
or security obtained as a result of the litigation.
Proposed law would have provided that the party or the party's attorney may redact the total
dollar amount of litigation financing contractually agreed to between the party and the
litigation financier prior to the production of the litigation financing contract to all other
parties to the litigation.
Proposed law would have added provisions excluding application to nonprofit legal
organizations seeking only injunctive relief on behalf of its clients from disclosure
requirements. Awards of costs or attorney fees to nonprofit legal organizations shall not be
affected by proposed law. Provided that a nonprofit legal organization shall not be required
to disclose its donors or sources of funding.
Proposed law would have provided that the existence of litigation financing, litigation
financing contracts or agreements, and all participants in such financing arrangements are
permissible subjects of discovery in all civil cases, including personal injury litigation or
matters arising out of personal injuries.
Proposed law would have provided relative to class action suits, provides that in addition to
the disclosure requirements set forth in proposed law, the legal representative of the putative
class shall disclose to all parties, putative class members, and the court, any legal, financial,
or other relationship between the legal representative and litigation financer.
Proposed law would have provided that any violation of proposed law would make the
litigation financing contract absolutely null.
Would have become effective August 1, 2023.
(Proposed to add R.S. 9:3580.1-3580.5)
VETO MESSAGE: "Please be advised that I have vetoed Senate Bill 196 of the 2023
Regular Session. This piece of legislation is clearly a pretense designed to gain a litigation
advantage under the guise of promoting transparency in litigation and protecting national
security.
When there is a legitimate dispute between Louisiana citizens or small businesses and their
insurers, commercial legal financing levels the playing field. Legal financing allows local companies and individuals with far fewer resources to pursue meritorious claims.
This bill would give large corporations and insurance companies a tactical advantage by
allowing them to exploit their newfound knowledge of an individual or small business's
litigation budget. Further, it would also force Louisiana citizens trying to recover from
natural disasters to potentially reveal their assessment of the litigation, and other information
provided to underwrite the legal merits of their claim.
Proponents of Senate Bill 196 argued the legislation is necessary for litigation transparency,
but the bill only requires plaintiffs to unilaterally disclose their commercial legal financing
arrangements. If true transparency is what was intended, the legislation would have required
all parties to disclose their legal financing arrangements. The proposed structure has one
desired outcome - to deter commercial legal finance companies from doing business in
Louisiana. The only beneficiaries of this would be wrongdoers who can simply outlast
victims because they have greater financial resources.
The Louisiana Legislature should make every effort to level the playing field for all of
those who are forced to litigate disputes. Instead, this bill operates to give one side in
litigation an advantage, to the detriment of those who are seeking to recover from injury,
economic damage, or property loss. As such, it will not become law."