ASSEMBLY FINANCIAL INSTITUTIONS AND INSURANCE COMMITTEE

STATEMENT TO

ASSEMBLY, No. 2159

with committee amendments

STATE OF NEW JERSEY

DATED:  JUNE 4, 2026

      The Assembly Financial Institutions and Insurance Committee reports favorably and with committee amendments Assembly Bill No. 2159.

      This bill requires disclosure of third-party litigation funding agreements and establishes certain responsibilities for litigation funders in civil or administrative actions. 

      The bill provides that a party to any civil or administrative action must provide to the court, for in camera review, any litigation funding agreement within 30 days after the commencement of a civil action or 30 days after the execution of a litigation funding agreement, whichever is later.  The bill also provides that a party may seek discovery of the terms of an arrangement with a litigation funder, including the litigation funding agreement, upon a showing that:

      (1)  the funding arrangement is relevant to the claims or defenses of the party;

      (2)  a litigation funder may have engaged in conduct that violates certain sections of the bill; or

      (3)  other good cause.

      The bill also caveats that a court may order other relief as it deems appropriate.

      The bill additionally codifies a fiduciary duty by litigation funders to a funded party to ensure the funder acts in the interests of the party. The litigation funder is jointly liable for costs and any monetary sanction against the party or party’s attorney.

      The bill also prohibits a litigation funder from engaging in certain conduct that can interfere with the funded party’s civil or administrative action. Specifically, a funder is prohibited from (1) influencing, making or overturning decisions relating to the initiation, conduct, settlement, or resolution of the underlying civil action, (2) offering to provide or providing legal advice to the funded party or party’s attorney, or selecting a funded party’s attorney, (3) attempting to secure a particular remedy or obtain a waiver of any remedy potentially available to the funded party, (4) receiving any payment that exceeds 25 percent of the litigation proceeds, or receiving without express consent of the funded party a combined payment with the funded party’s attorney fee that exceeds 50 percent of the monetary relief obtained, and (5) assigning or securitizing a litigation funding agreement in whole or in part.  

      The bill provides that a litigation funding agreement is unenforceable by the litigation funder or any successor-in-interest if the funder breaches its fiduciary duty or engages in conduct prohibited by the bill. The bill also provides that a court, executive branch agency or tribunal, may find a litigation funding agreement violates the bill and is unenforceable. Further, a funder’s breach of fiduciary duty or engagement in conduct prohibited by the bill constitutes an unfair or deceptive act or practice and a violation of the New Jersey consumer fraud act.  The bill also authorizes a court, executive branch agency or tribunal, to impose sanctions, in addition to any remedy otherwise available, for noncompliance with any provision of the bill.

      Finally, the bill provides that nothing in the act shall apply to pre-settlement funding obtained by an individual who is a party to a civil or administrative action.  Under the bill, “pre-settlement funding” means funding solely intended to pay costs of living or other personal or familial expenses during the pendency of a civil or administrative action where those funds are not used to defray litigation expenses.

      This bill was prefiled for introduction in the 2026-2027 session pending technical review.  As reported, the bill includes the changes required by technical review, which has been performed.

COMMITTEE AMENDMENTS:

      The committee amended the bill to:

      (1)  require that in any civil action, a party shall provide to the court, for an in camera review, any litigation funding agreement within 30 days after the commencement of a civil action or 30 days after the execution of a litigation funding agreement, whichever is later;

      (2)  permit a party to seek discovery of the terms of an agreement with a litigation funder, including the litigation funding agreement, upon a showing that:

      (a)  the funding arrangement is relevant to the claims or defenses of the party;

      (b)  a litigation funder violated certain provisions of the bill; or

      (c)  other good cause;

      (3)  extend the provisions of the bill to apply to administrative actions; and

      (4)  exempt pre-settlement funding agreements obtained by an individual who is a party to a civil or administrative action.