Design Highlights
- New regulations under SB 69 increase scrutiny on third-party litigation funders, potentially influencing liability insurance dynamics in Southeastern states.
- The requirement for funders to register and disclose criminal history may affect their risk assessment by insurers.
- Increased liability for funders supporting frivolous claims may lead to stricter underwriting standards in liability insurance policies.
- Transparency in funding agreements could prompt insurers to adjust their coverage terms based on the perceived risks of litigation funding.
- Ongoing legislative changes across states could create a ripple effect, prompting insurers to reevaluate their strategies in the evolving litigation landscape.
In a bold move that has some folks scratching their heads and others cheering, Georgia recently enacted SB 69, a law that promises to shake up the world of litigation funding. Signed into law by Governor Brian Kemp as part of a tort reform package, this legislation is set to take effect on January 1, 2026. It sounds like a game-changer, right? Well, it certainly aims to be. The law is designed to keep third-party financiers from inflating risks and dragging out resolutions, which, let’s be honest, has been an issue for a while.
Now, what’s the deal with this law? It targets agreements of $25,000 or more in civil litigation. If you’re a funder, you better get cozy with the Georgia Department of Banking and Finance. You’ll need to register, disclose who you are, and spill any criminal history. And if you’re affiliated with foreign governments or adversaries? Forget about it. You’re barred from playing in Georgia’s litigation sandbox. Noncompliance comes with serious penalties, including hefty fines and even prison time. That should make funders think twice. Additionally, the law mandates that all litigation financiers must register with the Georgia Department of Banking and Finance starting January 1, 2026.
Discovery mandates are also getting a facelift here. If you’re involved in a funding agreement over $25,000, it’s fully discoverable. That means the existence, terms, and conditions of these agreements will be front and center. But don’t get too excited; just because it’s discoverable doesn’t mean it’ll be admissible at trial.
And here’s where it gets really spicy: funders are now restricted from making decisions about attorney representation, settlements, or litigation strategy. Surprise! You thought you had control? Nope. The law demands clear contracts with no hidden terms and specific disclosures about cancellation rights. If you’re funding frivolous claims, you could be liable, too. Don’t think you can just sit back and let the lawyers handle it all. This law also includes provisions regarding seat belt usage in auto insurance claims, further demonstrating its comprehensive approach.
This new law isn’t just a Georgia problem. It’s a potential template for other Southeastern states. Insurers are watching closely. They’ve had their concerns about how litigation funding operates. Lowering exposure by limiting third-party influence makes their lives a bit easier. For businesses navigating these changes, understanding how general liability insurance protects against claims will become increasingly important as the litigation landscape evolves.
While states like Florida have dabbled in similar proposals, they haven’t all passed muster. Georgia’s SB 69 might just pave the way for a wave of legislative changes across the nation. Buckle up; the world of litigation funding is about to get a major shake-up.
