A view of the Georgia state capitol. The third-party legislation, passed by the House and Senate, would require outside groups that finance someone else’s lawsuit to register with the Georgia Department of Banking and Finance. (Sean Pavone/Getty Images)
Georgia lawmakers have passed a measure that would ensure juries know outside groups that are financing lawsuits.
The legislation, passed by both the House and Senate on March 27, would require outside groups that finance someone else’s lawsuit to register with the Georgia Department of Banking and Finance. The bill also would prohibit groups from pressuring plaintiffs on when or how to settle a case and stop foreign governments from funding others’ lawsuits in Georgia.
Republican Georgia Gov. Brian Kemp, who has been supporting the legislation, is expected to sign the bill into law as soon as next week.
National Federation of Independent Business State Director Hunter Loggins applauded the Georgia Legislature for passing legislation requiring greater oversight of third-party litigation financing.
“Third-party litigation financing is a predatory practice that’s less about justice and more about bullying defendants into agreeing to a big settlement,” Loggins said. “SB 69 won’t stop anyone from going to court, but it would ensure juries know who’s financing the lawsuit and ensure both sides get a fair hearing.”
Bauer
Georgia Motor Trucking Association called the bill “another step towards fairness in Georgia’s legal system. SB 69 regulates third-party litigation financing, protecting businesses and consumers.”
“We have seen this industry of financing litigation explode over the past decade,” said David Bauer, vice president of state and tax policy for American Trucking Associations. “It’s having the effect that we’re seeing litigation that may have perhaps been settled in the past now going to trial — and not necessarily benefiting the plaintiff, who may actually end out coming of the litigation with nothing.
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“We’ve heard interest rates on the recoveries up to 60%. So you do the math: Sixty percent going to the hedge fund in Miami, 30% to the lawyer, and what’s left over to the plaintiff, the alleged victim.”
Bauer stressed that juries and judges should know when a third-party investor has a stake in a civil lawsuit seeking damages, and defendants should be able to bring those facts to a jury’s attention.
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“Our approach to this is that you always need to have sunshine on this,” Bauer added. “It needs to be something that is disclosed to a jury, to a judge, to a fact finder and to the defense. In our view, that’s probative evidence that should be entered into the record.”
Added ATA Deputy General Counsel Pam Bracher, “In Georgia, a notorious judicial hellhole, landmark lawsuit abuse reform passed the General Assembly on March 28 and is awaiting the governor’s signature. Under the legislation championed by the Georgia Motor Trucking Association, fairness and balance to the civil litigation process will be restored.”
In a related development from February, Rep. Darrell Issa (R-Calif.), chairman of the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence and the Internet, Rep. Scott Fitzgerald (R-Wis.) and Rep. Mike Collins (R-Ga.) introduced HR 1109 — The Litigation Transparency Act of 2025.
Issa said in hundreds of cases every year and in greater frequency, civil litigation is being funded by undisclosed third-party interests as an investment for return — including from hedge funds, commercial lenders and sovereign wealth funds operating through shell companies.
“Third-party litigation funding also poses unique challenges in patent litigation cases, where too often investor-backed entities seek large settlements against American companies, distorting the free market and stifling innovation,” Issa added. “This widespread anti-transparency environment requires a legislative remedy that provides disclosure of investors receiving payment based on the outcome of a case. The bill will also require disclosure of the financing agreement between investors and parties to these civil actions.
“Our approach will achieve a far better standard of transparency in the courts that people deserve and our standard of law requires. We fundamentally believe that if a third-party investor is financing a lawsuit in federal court, it should be disclosed rather than hidden from the world and left absent from the facts of a case.”
