Ohio Becomes 23rd State to Regulate Litigation Financing

Ohio Gov. Mike DeWine recently signed HB 105 into law, which will require that any outside funders of litigation be disclosed. The law empowers enforcement of the statute by the state Attorney General.

Ohio's TPLF bill is a step forward for Ohioans who are seeking relief from rising prices and who need access to a functional justice system.

Judges, juries, attorneys and citizens deserve to know who is spending money to sustain a lawsuit, and whether there is undue influence on legal proceedings by funders. Plaintiffs and defendants need access to a justice system that is not burdened by excessive litigation. Small businesses need protection from frivolous lawsuits that drive up costs, threaten their livelihood and make their goods and services more expensive for consumers.

Ohio was the 23rd state in the country to regulate litigation funding. Many of these regulations ensure that this practice is more transparent. All of this has happened in just a few years, and multiple additional states are actively working on their own laws regarding the practice.

Ohio's transparency law continues national momentum to restore fairness, safety and order to our justice system.

North Carolina last month became the first state to ban most types of litigation funding all together, while preserving the right for under-resourced plaintiffs to obtain direct loans to sustain lawsuits against wealthier defendants.

And this week New Hampshire became the 24state to enact TPLF legislation, barring foreign adversaries from financing lawsuits in U.S. courts.

Ohio's law has the following components:

• Registration: Consumer and commercial funders must register with the Attorney General.
• Foreign money blocked: Broadly prohibits funding, either direct or indirect, from entities not domiciled in the U.S.
• Guardrails on funders: Bars funders from controlling litigation or making referral payments, with added consumer protections built in.
• Disclosure after the fact: Funding agreements must be disclosed to the AG within 14 days of case resolution. The AG will then publish them publicly, with redactions for confidentiality.
• No hiding behind contract terms: Agreements can't include non-discovery provisions; funding arrangements can still potentially be uncovered during litigation.
• AG enforcement.