Read the full stored bill text
Florida Senate
-
2026
CS for SB 1396
By
the Committee on Rules; and Senator Burton
595-02443-26 20261396c1
1 A bill to be entitled
2 An act relating to litigation financing consumer
3 protection; providing a short title; designating part
4 I of ch. 69, F.S., entitled “General Provisions”;
5 creating part II of ch. 69, F.S., entitled “Litigation
6 Financing”; creating s. 69.101, F.S.; defining terms;
7 creating s. 69.103, F.S.; authorizing courts to
8 consider the existence of a litigation financing
9 agreement under certain circumstances; creating s.
10 69.105, F.S.; prohibiting specified acts by litigation
11 financiers; providing that all rights to make certain
12 decisions in a legal proceeding remain solely with the
13 parties to such legal proceeding; creating s. 69.107,
14 F.S.; requiring certain parties to a legal proceeding,
15 or their counsels of record, which have entered into a
16 litigation financing agreement with a foreign person,
17 a foreign principal, or a sovereign wealth fund to
18 file and serve a notice identifying specified
19 information with the court, agency, or tribunal and
20 all other parties to the legal proceeding within a
21 specified timeframe; requiring that such notice also
22 be filed with the Department of Financial Services and
23 the Office of the Attorney General; providing that
24 certain information in a litigation financing
25 agreement is not required to be disclosed; authorizing
26 the court, agency, or tribunal to order that the
27 notice or supporting documentation be filed under seal
28 and issue protective orders to safeguard proprietary
29 or confidential information; prohibiting a foreign
30 litigation financier or person acting on its behalf
31 from using a domestic entity or affiliate to conceal
32 or evade such disclosure requirements or from
33 receiving, transmitting, or sharing certain
34 information obtained through litigation financing with
35 certain foreign persons, foreign principals, or
36 sovereign wealth funds; providing applicability;
37 providing for sanctions; providing construction;
38 creating s. 69.109, F.S.; providing that a litigation
39 financing agreement is void and unenforceable in
40 specified circumstances; providing for enforcement of
41 specified violations under the Florida Deceptive and
42 Unfair Trade Practices Act; authorizing any court,
43 agency, or tribunal of competent jurisdiction to
44 impose fines or other sanctions it deems appropriate
45 for violations of certain provisions; providing
46 severability; providing retroactive applicability;
47 providing applicability; providing an effective date.
48
49 Be It Enacted by the Legislature of the State of Florida:
50
51 Section 1.
This act may be cited as the “Litigation
52
Investment Safeguards and Transparency Act.”
53 Section 2.
Sections 69.011, 69.021, 69.031, 69.041, 69.051,
54
69.061, 69.071, and 69.081, Florida Statutes, are designated as
55
part I of chapter 69, Florida Statutes, and entitled “General
56
Provisions.”
57 Section 3. Part II of chapter 69, Florida Statutes,
58 consisting of ss. 69.101, 69.103, 69.105, 69.107, and 69.109,
59 Florida Statutes, is created and entitled “Litigation
60 Financing,” to read:
61
62
PART II
63
LITIGATION FINANCING
64
69.101
Definitions.—As used in this part, the term:
65
(1)
“Foreign person” means a person or an entity that is
66
not:
67
(a)
A citizen of the United States;
68
(b)
An alien lawfully admitted for permanent residence in
69
the United States;
70
(c)
An unincorporated association, a majority of members of
71
which are citizens of the United States or aliens lawfully
72
admitted for permanent residence in the United States; or
73
(d)
A corporation incorporated in the United States.
74
(2)
“Foreign principal” means:
75
(a)
The government or a government official of any country
76
other than the United States;
77
(b)
A political subdivision or political party, or the
78
officials thereof, of a country other than the United States; or
79
(c)
Any partnership, association, corporation,
80
organization, or other combination of persons organized under
81
the laws of, or having its principal place of business in, a
82
country other than the United States whose shares or other
83
ownership interest is owned by the government or a government
84
official of a country other than the United States or owned by a
85
political subdivision or political party, or the officials
86
thereof, of a country other than the United States.
87
(3)
“Foreign funder” means a foreign person, foreign
88
principal, or sovereign wealth fund that provides funding
89
directly or indirectly under a litigation financing agreement.
90
(4)
“Health care practitioner” has the same meaning as in
91
s. 456.001.
92
(5)
“Litigation financier” means a person engaged in the
93
business of providing litigation financing.
94
(6)
“Litigation financing agreement” or “litigation
95
financing” means a transaction in which a litigation financier
96
agrees to provide financing to a person who is a party to, or an
97
attorney or law firm representing a party, in a civil action, an
98
administrative proceeding, a claim, or other legal proceeding in
99
exchange for a right to receive payment, which right is
100
contingent in any respect on the outcome of such action, claim,
101
or proceeding or on the outcome of any matter within a portfolio
102
that includes such action, claim, or proceeding and involves the
103
same counsel or affiliated counsel. However, the term does not
104
apply to any of the following:
105
(a)
An agreement to provide funds for or to a party to a
106
civil action, an administrative proceeding, a claim, or other
107
legal proceeding for such person’s use in paying his or her
108
costs of living or other personal or familial expenses during
109
the pendency of such action, claim, or proceeding, which funds
110
are not used to finance any litigation or other legal costs.
111
(b)
An agreement wherein an attorney consents to provide
112
legal services on a contingency fee basis or to advance his or
113
her client’s legal costs, and where such services or costs are
114
provided by the attorney in accordance with the Florida Rules of
115
Professional Conduct or equivalent professional conduct rules
116
applicable in the attorney’s licensing jurisdiction.
117
(c)
An entity with a preexisting contractual obligation to
118
indemnify or defend a party to a civil action, an administrative
119
proceeding, a claim, or other legal proceeding.
120
(d)
A health insurer that has paid, or is obligated to pay,
121
any sums for health care for an injured person under the terms
122
of a health insurance plan or agreement.
123
(e)
The repayment of a financial institution as defined in
124
s. 655.005 for loans made directly to a party to a civil action,
125
an administrative proceeding, a claim, or other legal
126
proceeding, or to such party’s attorney, when repayment of the
127
loan is not contingent upon the outcome of such action, claim,
128
or proceeding or on the outcome of any matter within a portfolio
129
that includes such action, claim, or proceeding and involves the
130
same counsel or affiliated counsel.
131
(f)
Funding provided to a nonprofit organization
exempt
132
from federal income tax under s. 501(c)(3) of the United States
133
Internal Revenue Code,
provided
that
the nonprofit organization
134
uses the funding
only to provide pro bono legal representation
135
on behalf of a client or to engage in litigation on behalf of
136
itself, its members, or a client and does not seek punitive
137
damages, regardless of whether the nonprofit organization seeks
138
an award of costs or attorney fees.
139
(g) Funding provided by a nonprofit organization exempt
140
from federal income tax under
s
. 501(c)(3) of the United States
141
Internal Revenue Code, by grant or otherwise,
to cover the costs
142
and expenses of pro bono legal representation or litigation that
143
does not seek punitive damages, regardless of whether the
144
recipient of the funding seeks an award of costs or attorney
145
fees. The nonprofit organization may, contingent upon the
146
outcome of the litigation, receive repayment not to exceed the
147
amount of funding provided
.
148
(h) Funding provided in a foreign class action
lawsuit
149
where the
party domiciled in the United States
is a member of
150
the class.
151
(7)
“National security interests” means those interests
152
relating to the national defense, foreign intelligence and
153
counterintelligence, international and domestic security, or
154
foreign relations.
155
(8)
“Proprietary information” means information developed,
156
created, or discovered by a person, or which became known by or
157
was conveyed to a person, which has commercial value in the
158
person’s business. The term includes, but is not limited to,
159
domain names; trade secrets; copyrights; ideas; techniques;
160
inventions, regardless of whether patentable, and other
161
information of any type relating to designs; configurations;
162
documentation; recorded data; schematics; circuits; mask works;
163
layouts; source code; object code; master works; master
164
databases; algorithms; flow charts; formulae; works of
165
authorship; mechanisms; research; manufacture; improvements;
166
assembly; installation; intellectual property, including patents
167
and patent applications; and information concerning the person’s
168
actual or anticipated business, research, or development or
169
received in confidence by or for the person from any other
170
source.
171
(9)
“Sovereign wealth fund” means an investment fund owned
172
or controlled by a foreign principal or an agent thereof.
173
69.103
Litigation financing agreement; representation of
174
client interests; adequate representation.—A court may take the
175
existence of a litigation financing agreement into account:
176
(1)
In a class action lawsuit brought in the courts of this
177
state, when determining whether a class representative or class
178
counsel would adequately and fairly represent the interests of
179
the class.
180
(2)
In actions involving a common question of law or fact
181
pending before the court which may be or has been consolidated,
182
when determining whether the lead counsel or any co-lead counsel
183
would adequately and fairly represent the interests of the
184
parties to such actions.
185
69.105
Prohibited conduct.—A litigation financier may not:
186
(1)
Direct, or make any decisions with respect to, the
187
course of any civil action, administrative proceeding, claim, or
188
other legal proceeding for which the litigation financier has
189
provided financing, or any settlement or other disposition
190
thereof. This prohibition includes, but is not limited to,
191
decisions in appointing or changing counsel, choice or use of
192
expert witnesses, and litigation strategy. All rights to make
193
decisions with respect to the course and settlement or other
194
disposition of the subject civil action, administrative
195
proceeding, claim, or other legal proceeding remain solely with
196
the parties to such action, claim, or proceeding and their
197
counsel of record.
198
(2)
Contract for or receive, whether directly or
199
indirectly, a larger share of the proceeds of any civil action,
200
administrative proceeding, claim, or other legal proceeding
201
financed by a litigation financing agreement than the share of
202
the proceeds collectively recovered by the plaintiffs to any
203
such action, claim, or proceeding after the payment of any
204
attorney fees and costs owed in connection to such action,
205
claim, or proceeding.
206
(3)
Pay or offer to pay a commission, referral fee, or
207
other consideration to any person, including an attorney, a law
208
firm, or a health care practitioner, for referring a person to
209
the litigation financier.
210
(4)
Assign or securitize a litigation financing agreement,
211
in whole or in part.
212
(5)
Be assigned rights to or in any civil action,
213
administrative proceeding, claim, or other legal proceeding for
214
which the litigation financier provided financing, other than
215
the right to receive a share of the proceeds of such action,
216
claim, or proceeding pursuant to the litigation financing
217
agreement.
218
69.107 Transparency for foreign litigation
financiers
.—
219
(1) If a party to any civil action, administrative
220
proceeding, claim, or other legal proceeding filed in the United
221
States, or that party’s counsel of record, has entered into a
222
litigation financing agreement with a foreign person, foreign
223
principal, or sovereign wealth fund, the party, or the party’s
224
counsel of record, must, within 14 days after execution of the
225
agreement or within 7 days after filing such action, whichever
226
occurs first, file and serve a notice
with the court, agency, or
227
tribunal, and all other parties to the proceeding,
which
228
identifies:
229
(a)
T
he existence of the funding relationship;
230
(b)
T
he foreign person, foreign principal, or sovereign
231
wealth fund by legal
name and the jurisdiction under whose laws
232
it is organized
; and
233
(c)
E
ach foreign person, foreign principal, or sovereign
234
wealth fund
that, directly or indirectly, owns or controls
3
235
percent or more of the
capital, equity, or other beneficial
236
ownership interests in the litigation
financier, including the
237
legal name, address, and citizenship or country of
incorporation
238
or registration of each such person or entity
.
239
(2) The notice required in subsection (1) must be filed
240
with the court, agency, or tribunal
in which the action is
241
pending, served on all parties, and provided to the Department
242
of
Financial Services and the Office of the Attorney General.
243
(3) The dollar amounts, financing terms, and other
244
proprietary or trade
secret information
contained in or related
245
to the litigation financing agreement are not required to be
246
disclosed.
The court
, agency, or tribunal
may
order
the notice
247
or supporting documentation to be filed under seal and
may issue
248
protective orders as necessary to safeguard proprietary or
249
confidential
information.
250
(4) A foreign
litigation
financier
or any person acting on
251
its behalf may not:
252
(a) Use a domestic entity or
an
affiliate to conceal or
253
evade the disclosure requirements of
this section; or
254
(b) Receive, transmit, or share proprietary, privileged, or
255
national
security-related
information obtained through
256
litigation financing with any foreign person, foreign
principal,
257
or sovereign wealth fund not a party or attorney to the action.
258
(5)
The requirements of this section apply to a litigation
259
financing agreement entered into with any
litigation financier
260
if a
foreign person, foreign principal, or sovereign wealth fund
261
has provided or will provide funds, whether directly or
262
indirectly, to the litigation financier
which
amount to
5
263
percent
or more of the funds the financier has provided or is
264
committed to provide
under the
litigation funding agreement
.
265
(6) Failure to comply with this section may subject the
266
noncomplying party to appropriate
sanctions under s. 69.
109
or
267
the applicable rules of civil procedure. This section does not
268
create a private cause of action.
269
69.109
Violations; enforcement.—
270
(1)
A litigation financing agreement executed in violation
271
of this part is void and unenforceable.
272
(2)
A violation of s. 69.105 is a deceptive and unfair
273
trade practice actionable under part II of chapter 501.
274
(3)
A court, an agency, or a tribunal of competent
275
jurisdiction may impose fines or any other sanction it deems
276
appropriate upon any person who violates s. 69.107.
277 Section 4.
If any provision of this act or its application
278
to any person or circumstance is held invalid, the invalidity
279
does not affect other provisions or applications of the act
280
which can be given effect without the invalid provision or
281
application, and to this end the provisions of this act are
282
severable.
283 Section 5.
The disclosure requirements in s. 69.107
,
284
Florida Statutes, as created by this act, apply to any civil
285
action, administrative proceeding, claim, or other legal
286
proceeding pending or commenced on or after July 1, 2026. Any
287
party to or counsel of record for any civil action,
288
administrative proceeding, claim, or other legal proceeding
289
pending on July 1, 2026, who would have been required to make a
290
disclosure under s. 69.107, Florida Statutes, had it been in
291
effect at the time the relevant action occurred must make the
292
disclosure under that section by July 31, 2026. Failure to do so
293
is sanctionable as provided in s. 69.109, Florida Statutes.
294 Section 6.
Except as otherwise provided in this act, this
295
act applies to a litigation financing agreement entered into on
296
or after July 1, 2026.
297 Section 7. This act shall take effect July 1, 2026.