The legislative instrument and the following digest, which constitutes no part of the
legislative instrument, were prepared by Hanna Gettys.
CONFERENCE COMMITTEE REP ORT DIGEST
SB 355 2024 Regular Session Stine
Keyword and summary of the bill as proposed by the Conference Committee
CONTRACTS. Provides for regulation of litigation funding by a third party that is foreign person,
state, or wealth fund. (8/1/24)
Report adopts House amendments to:
1. Remove the definitions of "foreign person", "foreign state", "agency or
instrumentality of a foreign state" and "foreign sovereign wealth fund".
2. Define "foreign entity" as an entity that is (a) owned or controlled by the government
of a foreign country of concern, or (b) a partnership, association, corporation,
organizing or other combination of persons organized under the law of or having its
principal place of business in a foreign country of concern, or a subsidiary of such
entity.
3. Define "foreign country of concern" as a foreign government listed in 15 CFR 7.4,
including any agency of or any other entity of significant control of such foreign
country of concern.
4. Change reference from a "foreign person, foreign state, or foreign sovereign wealth
fund" to a "foreign entity".
Report rejects House amendments which would have:
1. Added proposed law relative to disclosure of financing agreements and discovery of
litigation financing contracts or agreements.
2. Added disclosure requirements and procedure for class action lawsuits relative to
proposed law.
3. Included that any litigation financing contract violations shall be an absolute nullity.
Report amends the bill to: 1. Provide that a litigation financer shall not decide, influence, or direct a contracting
party to any decision regarding a civil proceeding.
2. Provide that a litigation contract or agreement is subject to discovery in accordance
with the Code of Civil Procedure and Code of Evidence in all civil actions arising out
of personal injuries.
3. Require that nonprofit legal organizations funded by private donors shall represent
clients on a pro bono basis, and awards of costs or attorney fees to nonprofit legal
organizations shall not be affected by proposed law.
Digest of the bill as proposed by the Conference Committee
Proposed law provides definitions for the following terms: "foreign entity", "foreign country of
concern", "litigation expenses", "proprietary information", "national security interests", "foreign
third-party litigation funder", and "third-party litigation funder".
Proposed law provides that in any civil action in which a foreign third-party litigation funder
provides funds intended to defray litigation expenses or the financial impact of a negative judgment
and the source or sources of its funding includes a foreign entity, the third-party litigation funder
shall meet all of the following requirements:
(1)Disclose in writing to the attorney general the name, the address, and citizenship or the
country of incorporation or registration of any foreign entity that has a right to receive or
obligation to make any payment that is contingent on the outcome of the civil action, or
portfolio that includes the civil action and involves the same counsel of record or affiliated
counsel, by settlement, judgment, or otherwise.
(2)Disclose in writing to the attorney general the name, address, the citizenship or the country
of incorporation or registration of any foreign entity that has received or is entitled to receive
proprietary information or information affecting national security interests obtained as a
result of the funding agreement for such civil action. Further provides that this disclosure
does not pertain to information received by a party to the action, counsel of record, or law
firm of record.
(3)Produce to the attorney general a copy of any agreement creating a contingent right described
in proposed law.
Proposed law provides that the disclosure and certification required by proposed law shall be made
no later than 30 days after execution of any agreement or the date on which the civil action is filed.
Proposed law provides that a party who enters into an agreement described in proposed law after the
date on which the civil action is filed shall make the disclosure required by proposed law no later
than 30 days after being served. Proposed law provides that a disclosure required pursuant to proposed law shall be made of a
declaration under penalty of perjury based on actual knowledge of the declarant formed after
reasonable inquiry, provided to the attorney general by the third-party litigation funder making the
disclosure, and maintained by the attorney general to preserve the confidentiality of the parties to the
litigation, attorneys, and law firms.
Proposed law provides that no later than 30 days after the date on which a third-party litigation
funder knew that the disclosure required pursuant to proposed law is incomplete or inaccurate in any
material respect, the third-party litigation funder shall supplement or correct the disclosure.
Proposed law provides that it shall be unlawful for any foreign third-party litigation funder to engage
in any of the following:
(1)Knowingly enter into an agreement creating a right for anyone, other than the named parties,
counsel of record, or law firm of record, to receive or make any payment that is contingent
on the outcome of a civil action or any matter within a portfolio that includes the civil action
and involves the same counsel of record or affiliated counsel, the terms of which are to be
satisfied by funds directly sourced, in whole or in part, from a foreign entity.
(2)Direct or make any decisions with respect to the course of any civil action for which the
litigation funder has provided funding intended to defray litigation expenses or the financial
impact of a negative judgment related to the civil action. This prohibition includes, but is
not limited to, decisions in appointing or changing counsel, choice or use of expert witnesses,
litigation strategy, and settlement or other disposition.
(3)Be assigned rights to or in a civil action for which the litigation funder has provided funding
intended to defray litigation expenses related to the civil action or the financial impact of a
negative judgment, other than the right to receive a share of the proceeds pursuant to the
litigation financing agreement.
Proposed law provides that any agreement in violation of this proposed law shall be null and void.
Proposed law provides that a violation of this proposed law by a foreign third-party litigation funder
or a third-party litigation funder is a deceptive and unfair trade practice actionable pursuant to the
applicable laws of the state of La.
Proposed law provides that the attorney general may institute a legal action in a court of competent
jurisdiction to enforce compliance, impose fines, or prohibit a foreign third-party litigation funder
from operating within this state, or any other appropriate sanctions for violation of any provision of
proposed law.
Proposed law provides that the attorney general shall, at least once each calendar year, report to the
president of the Senate and the speaker of the House of Reps. describing foreign involvement in
litigation financing agreements in the preceding calendar year. Proposed law provides that the report shall include:
(1)The name, citizenship or the country of incorporation or registration of any foreign entity and
whether they were providing funds indented to defray litigation expenses or the financial
impact of a negative judgment.
(2)Whether any third-party litigation funder violated the prohibitions of proposed law, and if
the attorney general took any enforcement action under proposed law.
(3)Any determinations or analysis of the disclosures received.
Proposed law provides that the report shall not identify the parties to the civil action, the counsel of
record, or the law firm of record.
Proposed law provides that the attorney general shall distribute the reports pursuant to proposed law
in compliance with the provisions of proposed law.
Proposed law provides that the provisions of proposed law shall have prospective application.
Proposed law creates the Litigation Financing Disclosure Act.
Proposed law provides for definitions of "attorney", "litigation financer", "litigation financing",
"litigation financing contract or agreement", "party", and "proprietary information".
Proposed law provides that a litigation financer with a litigation financing contract or agreement with
the party shall not decide, influence, or direct the party or the party's attorney with respect to the
conduct of the underlying civil proceeding or any settlement or resolution of the civil proceeding,
or make any decision with respect to the conduct of the underlying civil proceeding or any settlement
or resolution of the civil proceeding. Further provides that the right to make these decisions remains
solely with the party and the party's attorney in the civil proceeding.
Proposed law provides that the existence of a litigation financing contract or agreement is subject
to discovery in accordance with the present law in all civil actions arising out of personal injuries.
Proposed law provides that proposed law shall not apply to nonprofit legal organizations funded by
private donors that represent clients on a pro bono basis. Further provides that awards of costs or
attorney fees to nonprofit legal organizations shall not be affected by proposed law.
Proposed law provides that proposed law shall not be interpreted to require a nonprofit legal
organization to disclose its donors or sources of funding.
Effective August 1, 2024.
(Adds R.S. 9:3580.1-3580.12)