House Bill 1260

AN ACT TO REQUIRE A FOREIGN THIRD-PARTY LITIGATION FUNDER TO DISCLOSE CERTAIN INFORMATION TO THE ATTORNEY GENERAL; TO REQUIRE SUCH DISCLOSURE IN WRITING TO THE ATTORNEY GENERAL; TO REQUIRE THE DISCLOSURE NO MORE THAN 30 DAYS AFTER EXECUTION OF THE AGREEMENT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. (1) The following words and phrases shall have the meanings defined in this section, as follows:

(a) "Foreign third-party litigation funder" means a foreign person, foreign state, or foreign sovereign wealth fund other than the named parties, counsel of record, or law firm of record, that is a third-party litigation funder.

(b) "Litigation expenses" means costs typically incurred in the course of civil litigation, including, but not limited to, filing fees, expert witness fees, transcript fees, court costs, travel expenses, and office overhead, but not including funds intended for use by a party for personal or familial expenses, such as food, rent, mortgage payments, car payments, and medical bills.

(c) "Third-party litigation funder" means any person or entity that provides funding intended to defray litigation expenses or the financial impact of a negative judgment related to a civil action and has the contractual right to receive or make any payment that is contingent on the outcome of an identified civil action by settlement, judgement, or otherwise, or on the outcome of any matter within a portfolio that includes the action and involves the same counsel or affiliated counsel. This term does not apply to: (i) The named parties, counsel of record, or law firm of record providing funding intended to defray litigation expenses related to the civil action, (ii) A person or entity providing funding solely intended to pay costs of living or other personal or familial expenses during the pendency of such civil action where such funds are not used to defray litigation expenses, (iii) Counsel of record, or law firm of record, or any referring counsel providing legal services on a contingency fee basis or to advance his or her client's legal costs where the services or costs are provided by counsel of record or law firm of record in accordance with the Rules of Professional Conduct, (iv) A health insurer, medical provider, or assignee that has paid, is obligated to pay, or is owed any sums for health care for an injured person under the terms of a health insurance plan or other agreement, (v) A financial institution providing loans made directly to a party, counsel of record, or a law firm of record when repayment of the loan is not contingent upon the outcome of such civil action or on the outcome of any matter within a portfolio that includes such civil action and involves the same counsel or affiliated counsel, (vi) Any person or entity providing funding to a nonprofit legal organization that represents clients on a pro bono, no-cost basis, if the nonprofit legal organization seeks only injunctive or declaratory relief on behalf of its clients. This part does not affect the award of costs or attorney's fees to a nonprofit legal organization in the pro bono, no-cost pursuit of injunctive relief.

(2) In any civil action in which a foreign third-party litigation funder provides funds intended to defray litigation expenses or the financial impact of a negative judgment and the source or sources of its funding includes a foreign entity, the third-party litigation funder shall meet all of the following requirements:

(a) Disclose in writing to the Attorney General the name, the address, and citizenship or the country of incorporation or registration of any foreign entity that has a right to receive or an obligation to make any payment that is contingent on the outcome of the civil action, or portfolio that includes the civil action and involves the same counsel of record or affiliated counsel, by settlement, judgment, or otherwise.

(b) Disclose in writing to the Attorney General the name, address, the citizenship or the country of incorporation or registration of any foreign entity that has received or is entitled to receive proprietary information or information affecting national security interests obtained as a result of the funding agreement for such civil action.

This disclosure does not pertain to information received by a party to the action, counsel of record, or law firm of record.

(3) The disclosure and certification required by this section shall be made no later than thirty (30) days after execution of any agreement or the date on which the civil action is filed.

(4) A party who enters into an agreement described in this section after the date on which the civil action is filed shall make the disclosure required by this section no later than thirty (30) days after being served.

SECTION 2. This act shall take effect and be in force from and after July 1, 2025.