Bill > S4374

This bill requires disclosure of third-party litigation funding agreements in civil and administrative actions in New Jersey, establishing comprehensive regulations for litigation funders. The legislation defines key terms such as "litigation funder" and "litigation funding agreement," and mandates that parties disclose any third-party funding arrangements at the time of initial pleading or when the agreement is made, without waiting for a discovery request. The bill imposes a fiduciary duty on litigation funders, prohibiting them from influencing legal decisions, offering legal advice, or attempting to secure or limit potential remedies. Litigation funders are restricted from receiving more than 25% of a settlement or judgment, and the combined payments to the funder and attorney cannot exceed 50% without the party's consent. The bill also prohibits funders from assigning or securitizing funding agreements. If a litigation funder violates the act's provisions, the funding agreement can be deemed unenforceable, and the funder may face sanctions and be subject to unfair practice regulations. Importantly, the bill excludes pre-settlement funding intended to cover living expenses and does not apply to contingent fee agreements between parties and their attorneys. The act will take effect 90 days after enactment and apply to funding agreements entered into after that date.

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https://www.njleg.state.nj.us/bill-search/2024/S4374