The Ohio Society of CPAs was among a number of business groups this week to support transparency in third-party civil lawsuits.
The Ohio Alliance for Civil Justice – of which OSCPA is a leader – on Sept. 28 submitted written testimony to the Senate Judiciary Committee in favor of Senate Bill 94. The bill will make third-party litigation funding more transparent, create much-needed oversight of a largely unregulated industry and enact statutory safeguards for consumers and businesses alike.
Proponent testimony was also given by Jordan Schwartz of the U.S. Chamber Institute for Legal Reform and Kevin Shimp of the Ohio Chamber of Commerce.
Shimp said a third-party funder in a lawsuit is problematic in Ohio because there is a lack of transparency. Non-disclosure of financing agreements enables third-party litigation financing companies to conceal their involvement in a lawsuit. It can also introduce incentives that prolong litigation and lead to more speculative lawsuits, he said.
Schwartz said provisions that will require disclosure will help identify conflicts of interest and ensure plaintiffs have control of the lawsuit. He also said it will help facilitate realistic settlement negotiations and level the playing field by giving defendants more information about plaintiff litigation resources.
The bill also requires litigation financing companies to register with the state to operate here, adding that it would bring Ohio into the mainstream. It would also bring oversight to an industry that has largely operated in secret.
Hannah News Service contributed to this report.