Article ID: 26d2e44c4b9dd34e9e18cc89a814b17812e40ed0d5f28aba30dc146aebd995f6
Source ID: secondary:businessinsurance.com
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URL: https://www.businessinsurance.com/north-carolina-bans-third-party-litigation-funding/
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North Carolina bans third-party litigation funding - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers North Carolina bans third-party litigation funding by Richard Sine Regulation Jun 23, 2026 North Carolina has prohibited third-party investment in civil litigation, apparently the first state in the nation to have done so. Gov. Josh Stein signed House Bill 315 into law on Monday after the measure passed the state’s House unanimously and the Senate by a 45-1 vote. Third-party investors such as hedge funds pay legal costs in return for a stake in the outcome. The legislation makes it “unlawful for a person to engage in litigation investment in this State or to furnish litigation investment to a party or counsel of record in a civil proceeding in this state.” A funder can incur civil penalties of up to $50,000 per violation. The law includes exceptions such as pro bono funding, insurers’ defense or indemnification obligations, or loans or financial support not contingent on a proceeding’s outcomes. North Carolina’s Chamber of Commerce applauded the measure. “Today, North Carolina took a historic step to protect the integrity of its civil justice system and preserve the legal certainty that supports economic growth and investment across our state,” said Chamber President Gary Salamido. “By becoming the first state in the nation to ban third-party litigation investment, North Carolina is further strengthening the competitive legal and business climate that has made our state one of the nation’s top places to live, work, and do business.” Insurer groups have targeted third-party litigation funding as a major driver of legal system abuse. Critics say that the practice encourages shaky claims and protracted litigation, while supporters say it can make access to the legal system more affordable. Thirty-nine funders are active in the U.S. commercial litigation market, according to consultancy Westfleet Advisors. In 2025 they made 346 new deals totaling $2.8 billion in commitments. 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