New Jersey 2024-2025 Regular Session

New Jersey Assembly Bill A5566

Introduced
4/10/25  

Caption

Requires disclosure of third-party litigation funding agreements and establishes certain responsibilities for litigation funders.

Impact

The bill's enactment would significantly alter the landscape of civil litigation by ensuring that all parties involved are aware of and can scrutinize the financial influences that support ongoing civil cases. It establishes a fiduciary duty for litigation funders towards the funded parties, meaning that funders must act in the best interest of those receiving their support. Additionally, the legislation holds funders jointly liable for any costs or monetary sanctions imposed on the funded party, thereby ensuring financial accountability from litigation funders. This could lead to a more equitable environment for litigants who rely on third-party funding to pursue their legal claims.

Summary

A5566 is a proposed legislation introduced in New Jersey that mandates the disclosure of third-party litigation funding agreements and delineates the responsibilities of litigation funders. Under this legislation, any party or their attorney involved in a civil action is required to disclose any existing funding agreements to the court and all involved parties either at the time of filing the initial pleading or when such an agreement is made, should it occur post-filing. This requirement aims to promote transparency in civil litigation financing and to protect the interests of the parties receiving funding.

Contention

Notably, the bill prohibits litigation funders from engaging in conduct that interferes with the funded party's civil action, such as influencing legal decisions, providing legal advice, or securing specific remedies without the party's consent. By limiting the financial influence of third parties, this legislation addresses concerns about predatory lending practices within legal financing. However, it could face opposition from entities within the litigation funding sector that may see these regulatory measures as burdensome and overly restrictive to the financing models they operate under.

Companion Bills

NJ S4374

Same As Requires disclosure of third-party litigation funding agreements and establishes certain responsibilities for litigation funders.

Similar Bills

NJ S4374

Requires disclosure of third-party litigation funding agreements and establishes certain responsibilities for litigation funders.

CA SB954

Mediation: confidentiality: disclosure.

GA SB69

"Georgia Courts Access and Consumer Protection Act"; enact

CA AB931

State Bar Act: consumer legal funding.

LA SB415

Creates the Litigation Financing Disclosure Act. (1/1/23)

LA SB196

Creates the Litigation Financing Disclosure and Security Protection Act. (8/1/23)

CA SB581

Third-party litigation financing.

IA SSB1122

A bill for an act regulating litigation financing contracts, and including effective date and applicability provisions.