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LABI continues push for fair and transparent legal environment
An LA Driven priority, HB 240 by Rep. Emily Chenevert (R-Baton Rouge), would prohibit a litigation financer from receiving more than the plaintiffs’ total recovery after attorney fees and costs are paid. Additionally, an attorney entering into a litigation financing agreement is required to disclose that contract to their client within 30 days. Currently, Louisiana law allows for these agreements to be discoverable rather than an automatic disclosure.
TPLF allows outside investors to finance a lawsuit in exchange for a share of any money recovered in the suit. These agreements are cloaked in secrecy, allowing funders to quietly influence the direction of a lawsuit, including deciding whether to accept a settlement or push the case to trial—often to the detriment of the plaintiffs.
This practice puts investment profits ahead of the plaintiff’s recovery, often leading to funders’ profits being higher than the plaintiff’s award.
TPLF has experienced explosive growth in recent years and is now a multi-billion-dollar industry worldwide, with an estimated $15.2 billion in commercial litigation investments in the United States alone.
Rep. Chenevert has been working to address TPFL for several sessions. Just last year, she brought this exact bill, where it ultimately died in the infamous Senate Jud A Committee without receiving a vote, but not before garnering bipartisan support in the House and passing easily, 83-6.
The measure will first be heard in the House Civil Law Committee, but a hearing date has not been set.
To hear more about the ongoing work to bring these agreements to light, listen to our first podcast episode of the year. Rep. Chenevert joined Sounds of Session this week. An abbreviated Q&A is available here.
LABI continues to support this approach to regulating third-party litigation financing to ensure the integrity of the justice system—not windfall profits for investors while plaintiffs are left high and dry. Transparency is essential: knowing who has a financial stake in a lawsuit sheds light on a practice that has largely operated in the shadows, encourages more ethical behavior and provides insight into the true scope of these funding schemes.
Also of priority to LABI: reining in runaway damage awards. Members in both chambers have filed legislation to curb this form of jackpot justice by instituting caps on general (non-economic) damages.
In the Senate, Sen. Beth Mizell (R-Franklinton) has filed SB 361, capping general damages at $500,000 in most circumstances. In the House, Rep. Kellee Dickerson (R-Denham Springs) is carrying HB 526, that mirrors Mizell’s. Also in the House, HB 118 by Rep. Chad Boyer (R-Breaux Bridge) places a $5 million cap.
Let’s be clear: damage caps do not prevent injured individuals from receiving compensation for medical bills, lost wages and other economic damages. They simply prevent runaway non-economic awards that can produce inconsistent or excessive outcomes. By capping the amount of general damages that can be awarded, compensation remains fair and proportionate—creating predictability in litigation for businesses and insurers.