Texas Senate Bill SB1567

Texas 2019 - 86th Regular

Caption

Relating to mandatory disclosure of third-party litigation financing agreements.

Impact

The implementation of SB1567 is expected to change existing laws and practices concerning litigation funding in Texas. By requiring the disclosure of third-party financing agreements, the bill aims to provide courts and parties involved in civil actions with vital information about potential financial influences on litigation. This requirement could lead to greater accountability among funders and litigants, potentially altering how cases are approached and settled. The Supreme Court of Texas is tasked with adopting rules related to this disclosure, which emphasizes the necessity for regulatory clarity regarding the application of this legislation.

Summary

Senate Bill 1567 addresses the issue of third-party litigation financing by mandating the disclosure of financing agreements related to civil actions. The bill defines third-party litigation financing as the provision of monetary or in-kind support to individuals or groups involved in civil litigation, with the repayment contingent upon the outcomes of those legal actions. This legislation aims to enhance transparency within the legal landscape, particularly concerning the influence of external financial support on civil cases. Additionally, the bill excludes certain types of loans and attorney-client fee arrangements from its definition, thereby narrowing its scope to specific financing arrangements that directly impact civil litigation outcomes.

Contention

While the bill seeks to bring more transparency to litigation financing, there are potential points of contention regarding its implementation and the scope of its provisions. Critics may argue that mandatory disclosure could deter individuals from pursuing legitimate claims due to increased scrutiny and the potential for financial repercussions. Additionally, there may be pushback from stakeholders in the legal and financing sectors who view the requirement as an overreach that could complicate or hinder access to necessary funding for civil actions. As such, balancing transparency with access to justice will be a key consideration as this bill moves forward.