Commercial litigation funding is a growing industry globally, involving financiers—often investment firms—raising funds to support civil court claims in exchange for a share of any financial rewards from the litigation. This unregulated practice can impact small businesses and consumers, as financial interests may conflict with parties directly involved in lawsuits.
New Hampshire seeks to address this with HB 733, a bill requiring disclosure of commercial litigation funding agreements to all involved parties. The state House of Representatives has passed the bill, and it awaits further action in the state Senate.
Rep. Brian Cole, representing Manchester, explained the legislation aims to “shine a light on a little known but lucrative practice.” The bill received testimony from NFIB New Hampshire before the Senate Judiciary Committee, where the organization emphasized the importance of transparency for fairness in the civil justice system and to ensure a level playing field for small businesses.
According to NFIB New Hampshire, “HB 733 lets small business owners know who is involved if a claim is filed against them.” Transparency is also said to enable courts and public policymakers to assess if third-party funding alters civil litigation to the disadvantage of local citizens.
The legislation faces opposition from trial lawyers and large investment firms, including New York City’s Parabellum Capital. The future of HB 733 remains in deliberation within the state Senate.
