Whether you’ve thought about it recently or not, litigation finance is a vital mechanism that helps keep the U.S. legal system accessible—especially for individuals who would otherwise be priced out of justice. But in the rush to regulate, Georgia’s Senate Bill 69 threatens to upend this balance by failing to differentiate between two entirely distinct types of litigation finance: commercial and consumer.

This fundamental misunderstanding is at the heart of SB 69—and why it matters so much.

First, a Necessary Clarification: Commercial vs. Consumer Litigation Funding

Commercial litigation funding refers to large-scale investments made by firms like Burford Capital or Omni Bridgeway (formerly Bentham). These firms back high-stakes corporate and patent litigation in exchange for a share of potential winnings. Their operations involve hedge funds, foreign investors, and billion-dollar portfolios.

Consumer legal funding, by contrast, provides small, non-recourse cash advances—typically around $2,000—to personal injury plaintiffs. These individuals have been hurt through no fault of their own and are often unable to work, pay rent, or cover basic living expenses while awaiting a settlement. Consumer legal funding does not pay legal costs and carries no influence over legal strategy or outcomes. It exists to help people stay afloat—not to pursue or manipulate litigation.

To lump these two under the same regulatory umbrella is not only misguided—it’s dangerous. It risks eliminating a critical safety net for the most vulnerable plaintiffs by applying rules meant for global investment firms to individuals living paycheck-to-paycheck.

Understanding Senate Bill 69: Provisions and Perspective

1. Mandatory Registration and Ownership Disclosure

• What SB 69 says: Litigation funders must register with the Georgia Department of Banking and Finance and disclose any entity holding 5% or more of voting shares.

• Perspective: Reasonable. Transparency promotes trust. This provision aligns with practices in adjacent industries and poses no significant burden to reputable funders.

2. Prohibition of Foreign Affiliations

• What SB 69 says: Entities with foreign adversary affiliations cannot register as litigation funders.

• Perspective: Misapplied. This provision responds to concerns about foreign influence in commercial litigation—particularly patent and intellectual property cases. But consumer legal funders are not vehicles for foreign intelligence or corporate espionage. Prohibiting foreign investment here is like banning an Italian investor from opening a Japanese restaurant out of national security concerns—it’s nonsensical and absolute overkill.

3. Restrictions on Legal Influence and Advice

• What SB 69 says: Funders may not offer legal advice or influence litigation strategy.

• Perspective: This is already best practice—and clearly defined in our contracts. For consumer legal funding, we explicitly state that funders have no role in legal decisions. Legal counsel remains 100% between the plaintiff and their attorney. Commercial funders may at times influence legal strategy, which is a different conversation altogether.

Here is an excerpt from a Gain contract:

“GAIN SHALL HAVE NO RIGHT TO AND WILL NOT MAKE ANY DECISIONS WITH RESPECT TO THE CONDUCT OF THE UNDERLYING LEGAL CLAIM OR ANY SETTLEMENT OR RESOLUTION THEREOF AND THAT THE RIGHT TO MAKE THOSE DECISIONS REMAINS SOLELY WITH ME (the plaintiff) AND MY ATTORNEY IN THE LEGAL CLAIM.”

4. Disclosure Requirements in Financing Agreements

• What SB 69 says: Funders must include bold disclosures in agreements to ensure plaintiffs understand terms.

• Perspective: The industry already uses plain-language disclosures and clearly formatted documentation—including bold and title-case type (note the excerpt from one of our contracts above). Transparency is essential, but micromanaging formatting doesn’t enhance clarity. More red tape doesn’t mean more protection.

5. Limitations on Financial Recovery

• What SB 69 says: Funders can’t recover more than the plaintiff’s net proceeds after fees and costs.

• Perspective: This provision fundamentally misunderstands how consumer legal funding works. Consumer advances are non-recourse—meaning funders are only repaid if there is a settlement or judgment. These are not speculative investments in legal outcomes; they are cash advances already disbursed directly to injured plaintiffs to cover necessities like rent, food, and medical care. Limiting recovery on these advances doesn’t protect consumers—it puts them at risk. If consumer funders can’t recover more than the plaintiff’s net proceeds, they may not recover the amount they already advanced. That math doesn’t work for any business model and would likely eliminate access to funding for future plaintiffs. In commercial litigation, funders invest in legal expenses and sometimes influence litigation strategy, so limiting their upside is a separate conversation. But in consumer funding, there’s no legal influence—and the money has already gone directly to the individual. Applying the same recovery limitations to commercial and consumer legal funding does not make any sense.

Real-world example: A plaintiff receives a $2,000 advance. Upon settlement, the funder is due $3,200. Under a capped-recovery rule, that $1,200 return could be forbidden—despite the funder having taken 100% of the financial risk upfront. Worse, if combined with “loser pays” liability provisions (more on that below), the funder could be on the hook for significant costs if the plaintiff loses their case. That imbalance would drive funders out of the market and leave injured plaintiffs without the help they need.

6. Loser Pays Provision

• What SB 69 says: “A litigation financier that agrees to provide $25,000.00 or more in funding pursuant to a litigation financing agreement may be jointly and severally liable for any award or order imposing or assessing costs or monetary sanctions for frivolous litigation against a consumer, entity, or a legal representative of such consumer or entity…provided, however, that where the litigation financier’s right of repayment is a fixed amount set by contract, the liability of such litigation financier shall not exceed the right of repayment less the amount already extended.” (SB 69, lines 277–285)

• Perspective: This provision—referred to as a “loser pays” clause—seeks to hold funders accountable for costs in cases deemed frivolous. While the bill attempts to address the difference between commercial and consumer litigation funding by including a carveout for funders who offer fixed repayment agreements under $25,000, the distinction doesn’t go far enough. The reality is that many catastrophic personal injury cases—where plaintiffs are most vulnerable—require advances that exceed $25,000. This doesn’t make them commercial cases; it simply reflects the severity of the plaintiff’s circumstances.

7. Indemnification from Legal Fees and Costs

• What SB 69 says: “In each litigation financing contract, the litigation financier shall agree to indemnify, and shall indemnify even without such agreement, the plaintiffs and claimants…and such plaintiffs’ and claimants’ legal representatives against any adverse costs, attorney’s fees, damages, or sanctions…provided, however, that such indemnification shall not be required…for [those] resulting from the intentional misconduct of such plaintiffs or claimants or their legal representatives.” (SB 69, lines 286–294)

• Perspective: This provision is both ambiguous and problematic. While seemingly designed to protect plaintiffs, it imposes sweeping liability on funders—even in cases where they had no control over the litigation strategy or outcome. If a case fails, the financier could be responsible for seven-figure legal penalties or sanctions, despite having no role in legal decision-making. This level of exposure is not only unworkable, it’s preposterous. The result will likely be fewer funding options, stricter terms, and higher rates—in an attempt to offset the risk.

Real-world example: A woman is struck by a vehicle and hospitalized for three months, accruing over $3 million in medical bills. She needs a wheelchair-accessible van and a ramp just to return home. A consumer funder steps in and advances $30,000 to help her get out of the hospital. This is not a bet on litigation—it’s a lifeline. Under SB 69, that funder could now be exposed to massive liability if the case is lost or deemed frivolous—even if the advance was non-recourse and the repayment was contractually fixed. That makes it financially irresponsible for funders to provide help in high-need cases. The result? Plaintiffs in the most tragic and expensive cases will be left without litigation funding options.

8. Prohibition on Reporting to Credit Agencies

• What SB 69 says: “A litigation financier shall not…report a consumer to a credit reporting agency if insufficient funds remain to repay the litigation financier in full from the proceeds received from any judgment, award, settlement, verdict, or other form of monetary relief…” (SB 69, lines 266-270)

• Perspective: This provision mischaracterizes the nature of consumer legal funding. These are non-recourse advances, not loans—plaintiffs only repay if they win. If there’s no recovery, there’s no repayment obligation. Credit reporting is irrelevant unless there’s fraud, which is exceedingly rare. Rather than protecting consumers, this clause introduces unnecessary regulation and confusion into an already niche financial service.

In Closing: Separate the Issues—Protect the People

SB 69 introduces some useful transparency standards, like registration and disclosures. But by failing to distinguish consumer legal funding from commercial litigation finance, it risks devastating the very people it claims to protect.

The litigation finance industry at large, including both commercial and consumer funding, does not need to be feared—it needs to be better understood.