Bill Description: House Bill 946 would regulate and restrict what it defines as third-party litigation financing, effectively limiting the right of contract for both litigants and litigation financiers.
Rating: -4
NOTE: House Bill 946 is related to House Bill 646 (2026).
Does it create, expand, or enlarge any agency, board, program, function, or activity of government? Conversely, does it eliminate or curtail the size or scope of government?
House Bill 946 would create Chapter 21, Title 48, Idaho Code, titled the “Litigation Financing Transparency, National Security, and Consumer Protection Act.” This act would regulate and restrict what it defines as third-party litigation financing, effectively limiting the right of contract for both litigants and litigation financiers.
The act would expand government by requiring the Secretary of State to manage registrations for litigation financiers, including collecting detailed information on owners and controllers. It also creates new regulations and related oversight obligations for the state, which would likely require additional resources.
(-1)
Does it give government any new, additional, or expanded power to prohibit, restrict, or regulate activities in the free market? Conversely, does it eliminate or reduce government intervention in the market?
The act creates new regulatory authority over what is currently a largely unregulated market segment. It would empower government via the Secretary of State to regulate the litigation financing industry, including mandating registration, enforcing disclosures and discovery of contracts, prohibiting funding from foreign adversaries, restricting proprietary information disclosure, and overseeing foreign litigation funding.
The act would explicitly prohibit a litigation financier from receiving or recovering any payment that exceeds 25% of the amount of any judgment, award, settlement, verdict, or other form of monetary relief obtained in the legal claim that is the subject of the litigation contract.
The act would also prohibit paying or offering commissions, referral fees, rebates, or other forms of consideration to any person in exchange for referring a consumer or a consumer's legal representative to a litigation financier.
(-1)
Does it increase barriers to entry into the market? Examples include occupational licensure, the minimum wage, and restrictions on home businesses. Conversely, does it remove barriers to entry into the market?
The act would limit who can participate in the litigation financing market and require registration and extensive disclosures from those who do.
(-1)
Does it violate the spirit or the letter of either the United States Constitution or the Idaho Constitution? Examples include restrictions on speech, public assembly, the press, privacy, private property, or firearms. Conversely, does it restore or uphold the protections guaranteed in the US Constitution or the Idaho Constitution?
The act flagrantly disallows voluntary contracts between litigants and litigation financiers. It says, “Any violation of this chapter by a litigation financier shall render the litigation financing contract unenforceable by the litigation financier or any successor-in-interest to the litigation financing contract.”
(-1)
