Florida Lawmakers Poised to Revisit Limits on Litigation Funding
As the Florida Legislature’s 2026 regular session kicks off today, property-casualty insurance leaders are not anticipating significant changes. This expectation stems from the substantial impact that the 2022 reforms have already had on curbing excessive litigation costs in recent years.
However, one notable bill is gaining traction among supporters who believe it could further mitigate litigation expenses and losses. This bill addresses growing concerns regarding third-party investments in lawsuits, which many argue prolong litigation and encourage unwarranted class-action suits.
House Bill 1157, introduced by state Rep. Fabian Basabe, R-Miami Beach, mirrors measures that failed to pass in 2024 and 2025. Its companion, Senate Bill 1396, sponsored by Sen. Colleen Burton, seeks to limit the influence of third-party litigation financiers. Both bills have garnered support from the U.S. Chamber of Commerce.
According to a statement from the U.S. Chamber’s Institute for Legal Reform, “These bills will shut down a dangerous loophole that allows hostile foreign entities to bankroll litigation designed to undermine Florida’s economy and harm its citizens, a critical step toward reclaiming the state’s legal system from foreign manipulation.”
The proposed legislation would prevent funders from directing any aspect of civil actions, including selecting lawyers, expert witnesses, and litigation strategies. Additionally, it would prohibit financiers from receiving a larger share of awards or settlements than the plaintiffs themselves.
Further stipulations of the bills include:
- Prohibiting funders from paying commissions or fees to individuals who refer clients to litigation financiers.
- Mandating that all agreements with foreign entities be disclosed within 14 days of signing, clearly identifying all parties involved. While financing terms do not need to be disclosed, courts may allow these agreements to be filed under seal.
- Enabling courts to impose fines and other sanctions on parties that fail to comply with these requirements.
If the bills are approved and signed into law, they would take effect on July 1, 2026.
While the Florida Senate appears likely to support the measures, the House may be less inclined to approve them, especially given the prevailing sentiment for less tort reform, according to lobbyist George Feijoo, who represents the U.S. Chamber.
If these litigation funding restrictions are enacted, Florida would join at least eight other states that have implemented some form of limits on third-party lawsuit financiers. States such as Georgia, Kansas, Louisiana, Indiana, Montana, Oklahoma, Wisconsin, West Virginia, and New York currently have laws regulating this practice. Washington State is also considering similar legislation this year, and discussions among Alabama lawmakers and insurance interests have been reported as they prepare for their session starting today, January 13.
The full text of Florida’s HB 1157 can be viewed here.
Related: 5-Year Cost of Litigation Funding to Commercial Insurers Could Top $25B
Litigation Finance Hits a Wall After Bets on Huge Gains Falter
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As the Florida Legislature’s 2026 regular session kicks off today, property-casualty insurance leaders are not anticipating significant changes. This expectation stems from the substantial impact that the 2022 reforms have already had on curbing excessive litigation costs in recent years.
However, one notable bill is gaining traction among supporters who believe it could further mitigate litigation expenses and losses. This bill addresses growing concerns regarding third-party investments in lawsuits, which many argue prolong litigation and encourage unwarranted class-action suits.
House Bill 1157, introduced by state Rep. Fabian Basabe, R-Miami Beach, mirrors measures that failed to pass in 2024 and 2025. Its companion, Senate Bill 1396, sponsored by Sen. Colleen Burton, seeks to limit the influence of third-party litigation financiers. Both bills have garnered support from the U.S. Chamber of Commerce.
According to a statement from the U.S. Chamber’s Institute for Legal Reform, “These bills will shut down a dangerous loophole that allows hostile foreign entities to bankroll litigation designed to undermine Florida’s economy and harm its citizens, a critical step toward reclaiming the state’s legal system from foreign manipulation.”
The proposed legislation would prevent funders from directing any aspect of civil actions, including selecting lawyers, expert witnesses, and litigation strategies. Additionally, it would prohibit financiers from receiving a larger share of awards or settlements than the plaintiffs themselves.
Further stipulations of the bills include:
- Prohibiting funders from paying commissions or fees to individuals who refer clients to litigation financiers.
- Mandating that all agreements with foreign entities be disclosed within 14 days of signing, clearly identifying all parties involved. While financing terms do not need to be disclosed, courts may allow these agreements to be filed under seal.
- Enabling courts to impose fines and other sanctions on parties that fail to comply with these requirements.
If the bills are approved and signed into law, they would take effect on July 1, 2026.
While the Florida Senate appears likely to support the measures, the House may be less inclined to approve them, especially given the prevailing sentiment for less tort reform, according to lobbyist George Feijoo, who represents the U.S. Chamber.
If these litigation funding restrictions are enacted, Florida would join at least eight other states that have implemented some form of limits on third-party lawsuit financiers. States such as Georgia, Kansas, Louisiana, Indiana, Montana, Oklahoma, Wisconsin, West Virginia, and New York currently have laws regulating this practice. Washington State is also considering similar legislation this year, and discussions among Alabama lawmakers and insurance interests have been reported as they prepare for their session starting today, January 13.
The full text of Florida’s HB 1157 can be viewed here.
Related: 5-Year Cost of Litigation Funding to Commercial Insurers Could Top $25B
Litigation Finance Hits a Wall After Bets on Huge Gains Falter
Interested in Lawsuits?
Get automatic alerts for this topic.
