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 deeply.
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 Italian investors from owning part of an Italian restaurant out of national security concerns—it’s 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.
4. Disclosure Requirements in Financing Agreements
- What SB 69 says: Funders must include bold disclosures in agreements to ensure plaintiffs understand terms.
- Perspective: Transparency is essential, but micromanaging formatting doesn’t enhance clarity. The industry already uses plain-language disclosures and clear documentation. 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 misses the point. Consumer funders take significant financial risk. Advances are non-recourse—meaning we’re only paid if there’s a settlement or judgment. Limiting recovery could eliminate access to funding altogether.
Here’s a real-world example: The average advance is $2,000. We might receive $3,200 upon settlement. But under “loser pays” or capped-recovery rules, our $1,200 return could turn into a million-dollar liability. That math makes no sense for investors—and leaves plaintiffs stranded.
6. Prohibition on Reporting to Credit Agencies
- What SB 69 says: Funders cannot report to credit bureaus if plaintiffs exhaust their advance.
- Perspective: This provision misunderstands how consumer legal funding works. These are non-recourse advances—not loans. Plaintiffs only repay if they win. Credit reporting is irrelevant unless there’s fraud, which is rare. This rule adds complexity without benefit.
7. Indemnification from Legal Fees and Costs
- What SB 69 says: Plaintiffs are to be indemnified from certain legal fees and costs.
- Perspective: Ambiguous. Without specifics, this is difficult to evaluate. But the risk is that it discourages funding or creates confusion around who is ultimately responsible for legal expenses.
The Real Harm of SB 69’s Overreach
Senate Bill 69 is rooted in the wrong assumption: that all litigation finance is the same. And it’s not.
Commercial funders invest in legal outcomes. Consumer funders invest in people—injured, working-class plaintiffs with nowhere else to turn.
Conflating the two does more than muddy the waters—it shuts off essential lifelines. At Gain, for example, our contracts make it crystal clear:
“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 AND MY ATTORNEY IN THE LEGAL CLAIM.”
This is not about influencing litigation. It’s about helping people survive long enough to get justice.
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.
Litigation finance doesn’t need to be feared—it needs to be understood. Thoughtful regulation can support ethical, consumer-first funding without restricting access to justice.
Georgia’s lawmakers have a choice: regulate with nuance—or overreach and harm their own constituents.
It’s time to get this right.