SB 1534 would create a new Part II of chapter 69, Florida Statutes, governing “litigation financing” in Florida and titled the “Litigation Investment Safeguards and Transparency Act.” The bill defines litigation financing as third-party funding provided to a party or counsel in exchange for a contingent right to payment tied to the outcome of a case or related portfolio of cases, while carving out several arrangements that are not covered, including ordinary contingency-fee representation, certain loans, health insurance payments, and some nonprofit pro bono funding arrangements.
The bill would impose a series of restrictions and disclosure requirements on litigation financiers, attorneys, and parties. It would prohibit financiers from controlling litigation strategy, selecting counsel, paying referral fees, taking a larger share of proceeds than the plaintiffs receive after fees and costs, assigning or securitizing the agreement, or receiving rights in the underlying claim beyond the agreed share of proceeds. It would also require disclosure of litigation financing agreements to clients, opposing parties, courts, insurers with indemnity obligations, and in some cases the Department of Financial Services and the Attorney General, with special disclosure rules for class actions, consolidated cases, and foreign persons, foreign principals, or sovereign wealth funds involved in the financing.
The bill also addresses conflicts of interest and enforceability. Courts could consider the existence of litigation financing when evaluating adequacy of class representatives or lead counsel. Litigation financiers would be required to indemnify plaintiffs and their counsel against adverse costs, attorney fees, damages, or sanctions, except where those losses resulted from intentional misconduct by the plaintiffs or counsel. Agreements made in violation of the new part would be void and unenforceable, and violations of the prohibited-conduct and indemnification provisions would be treated as deceptive and unfair trade practices under Florida’s consumer protection law.
In terms of impact on state law, SB 1534 would add a new regulatory framework to chapter 69 and create new disclosure, discovery, sanction, and enforcement mechanisms for litigation funding arrangements entered into on or after July 1, 2025, with retroactive disclosure obligations for pending matters. It would affect litigation funders, plaintiffs, attorneys, class counsel, insurers, and any foreign-linked funding sources, and would give courts, agencies, and tribunals authority to impose sanctions for disclosure violations.
The bill appears to have been driven by concerns about transparency, foreign influence, and control over litigation, and the overall policy direction is restrictive rather than permissive. No committee transcript or recorded votes were provided, but the bill died in the Senate Judiciary Committee, suggesting it did not advance despite the stated goal of safeguarding litigation investment practices. The main points of contention implied by the text are the breadth of mandatory disclosures, the treatment of foreign investors and sovereign wealth funds, the required indemnification of plaintiffs and counsel, and whether the bill would unduly burden or chill third-party litigation funding.
SB 1534 would create a new statutory regime in chapter 69 regulating litigation financing, including definitions, prohibited practices, disclosure duties, indemnification requirements, and enforcement provisions. It would make noncompliant litigation financing agreements void and unenforceable, authorize sanctions for disclosure violations, and treat certain violations as deceptive and unfair trade practices under chapter 501. The bill would affect litigation funders, attorneys, parties to civil and administrative proceedings, class action counsel, insurers, and foreign-linked funding sources, with application to agreements entered into on or after July 1, 2025 and disclosure obligations reaching pending matters.
The bill’s overall sentiment appears cautious and skeptical of litigation financing, emphasizing transparency, conflict-of-interest safeguards, and limits on outside control of lawsuits. Because no committee discussion or votes were provided, there is no recorded floor or committee debate to measure directly, but the bill’s failure in Judiciary suggests it did not secure enough support to advance. The text indicates a policy preference for restricting third-party funding rather than expanding it.
The likely points of contention are the scope of disclosure requirements, especially the mandatory production of financing agreements and the reporting of foreign persons, foreign principals, and sovereign wealth funds to state officials. Another major issue is the bill’s prohibition on financier control and its requirement that financiers indemnify plaintiffs and counsel for adverse costs and sanctions, which could be viewed as unusually burdensome by supporters of litigation funding. Opponents of the bill would likely argue that these provisions could chill legitimate funding, while supporters would emphasize preventing hidden influence, conflicts of interest, and foreign involvement in Florida litigation.