Mandatory disclosure of third-party litigation financing agreements

Texas Senate Bill 3025, introduced in March 2025 by Senator Brent Hagenbuch, aimed to require parties in civil lawsuits to disclose any financial support they receive from third parties, such as investors or companies, who fund the lawsuit in exchange for a portion of any financial recovery. The bill directed the Texas Supreme Court to establish rules mandating this disclosure to all involved parties. However, the bill was referred to the Senate State Affairs Committee in April 2025 and did not progress further, effectively dying in committee.

Supporters of SB3025 argued that mandatory disclosure of third-party litigation financing would promote transparency in the legal process, ensuring that all parties are aware of external financial interests that could influence litigation strategies and outcomes. They believed this measure would help prevent potential conflicts of interest and maintain the integrity of the judicial system.

Opponents of the bill contended that requiring disclosure of litigation financing agreements could deter individuals and entities from pursuing legitimate claims, particularly those lacking the resources to fund lengthy legal battles. They argued that such disclosures might expose sensitive financial arrangements, potentially giving an unfair advantage to opposing parties and undermining the confidentiality of legal strategies.