RÉSUMÉ DIGEST
ACT 765 (SB 355) 2024 Regular Session Stine
New 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".
New 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 new law.
New law provides that the disclosure and certification required by new law shall be made no
later than 30 days after execution of any agreement or the date on which the civil action is
filed.
New law provides that a party who enters into an agreement described in new law after the
date on which the civil action is filed shall make the disclosure required by new law no later
than 30 days after being served.
New law provides that a disclosure required pursuant to new 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.
New 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 new law is incomplete or inaccurate in
any material respect, the third-party litigation funder shall supplement or correct the
disclosure.
New 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.
New law provides that any agreement in violation of this new law shall be null and void.
New law provides that a violation of this new 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.
New 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 new law.
New 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.
New 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 new law, and
if the attorney general took any enforcement action under new law.
(3)Any determinations or analysis of the disclosures received.
New law provides that the report shall not identify the parties to the civil action, the counsel
of record, or the law firm of record.
New law provides that the attorney general shall distribute the reports pursuant to new law
in compliance with the provisions of new law.
New law provides that the provisions of new law shall have prospective application.
New law creates the Litigation Financing Disclosure Act.
New law provides for definitions of "attorney", "litigation financer", "litigation financing",
"litigation financing contract or agreement", "party", and "proprietary information".
New 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.
New law provides that the existence of a litigation financing contract or agreement is subject
to discovery in accordance with the existing law in all civil actions arising out of personal
injuries.
New law provides that new 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 new law.
New law provides that new 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)