Though a Louisiana bill to require disclosure of litigation-funding agreements in civil lawsuits was vetoed last week, some observers remain hopeful that the veto might be overridden or that the measure could be passed again next year.
Senate Bill 196, authored by state Sen. Barrow Peacock (R-Bossier City), failed to gain the signature of Gov. John Bel Edwards, but supporters of the measure, including the Louisiana Association of Business and Industry (LABI), don’t see the veto as the end of the story.
SB 196 would have mandated more transparency about third-party litigation financing, or TPLF, which the American Tort Reform Association (ATRA) says has become more common worldwide in recent years. TPLF refers to how outside funders, such as hedge funds and sovereign-wealth funds, invest in lawsuits in exchange for a share of a settlement or damages award.
“In the event the Legislature reconvenes later this month for a veto-override session, we would obviously love to see SB 196 among the list of bills taken up,” Lauren Hadden, LABI’s general counsel, said in an email to the Louisiana Record. “This bill does not outlaw or in any way prohibit the continued use of these agreements – rather, this is simply a disclosure bill and is one that did not garner support simply along party lines.”
SB 196 passed the state Senate on a concurrence vote of 30-8, but in the House it fell just short of the needed two-thirds support to make the measure “veto-proof.” House lawmakers passed the bill by a margin of 55-28.
“If SB 196 does not find its way back to the Capitol this year, we stand ready to work with all interested parties to once again develop legislation that addresses this issue during next year’s legislative session,” Hadden said.
She added that SB 196 would have brought more fairness to the civil justice system.
“We were obviously disappointed in the governor’s veto of SB 196, as we believe the bill is a balanced transparency measure that would have simply balanced the ledger in litigation,” Hadden said. “Just as a plaintiff has access at the outset of a suit to know whether and to what extent a defendant is covered by insurance, a defendant should be entitled to know when there is a third party that has a particular financial interest in the outcome of a case.”
TPLF critics contend these financial agreements can give third parties undue influence over strategic litigation decisions in civil lawsuits.
Some GOP lawmakers, such as Rep. Jerome Zeringue (R-Houma), have expressed a desire to hold a veto override session in the wake of the governor saying that he would veto a Republican measure banning gender transition for minors in the state.