OKLAHOMA CITY (OBV) – A bill that requires disclosure of third-party funding of commercial lawsuits succeeded in the Oklahoma State Senate on Monday.
Senate Bill 625, written by Sen. Brent Howard, R-Oklahoma City, and Rep. Erick Harris, R-Edmond, passed the Senate with a 39-8 vote.
SB 625, along with House Bill 2619, seeks to bring greater transparency to the judicial system to prevent unethical legal maneuvering and exploitation by third parties who fund lawsuits against businesses.
The bill requires that outside commercial litigation funding agreements be disclosed during the judicial process, upon request in discovery.
“This outside commercial litigation funding agreements would not be necessarily between that attorney and the client. It would be someone seeking to fund the litigation and, again, would be a third party that would not be subject to that direct communication,” Howard said.
The party filing the lawsuit must also disclose whether the third party is an entity controlled by a foreign adversary to the United States.
“The party shall specify which persons have access to the documents if the party admits that an entity controlled by a foreign adversary may access the documents,” the bill states.
Howard said his bill does not violate due process rights.
“I think the judges and or juries, or whoever the trier of fact is, would determine that on the merits. It’s more a matter of who is actually funding this or putting it in behind. So again, no, within my limited purview, I can’t imagine a due process challenge. It would be enforced by the court,” he said.
While defending his bill, Howard was asked if the legislation creates an unfair advantage for well-funded defendants by allowing them to pressure plaintiffs who rely on litigation funding.
“I think that we already have somewhat of that disparity. Now, those people with the deepest pockets can go the longest in litigation, whether that’s grinding it out or whether that’s bringing multiple cases. So, I don’t think that this really increases any disparity that’s already there,” Howard said.
Foreign adversaries can exploit the judicial process to harm U.S. companies, Howard said.
“Warfare anymore is not just on the battlefields and digging in trenches and shooting across concertina wire. It is in space, cyber warfare, as well as lawfare that’s being instituted on this. So, highlighting where those are and when they appear – again, if these are requested in discovery request – I think is not too much of an overdue burden and just makes it a lot more highlighted and reviewed by those people making that request,” Howard said.
SB 625 will next move to the Oklahoma House of Representatives for consideration.
