State Statutes Governing Litigation Funding Disclosure and Licensing

A survey of the states that have enacted funder-specific statutes, what they require, and how the frameworks differ.

Which states have statutes specifically regulating litigation funding? A growing but still limited group, including Indiana, Kansas, Louisiana, Montana, Oklahoma, West Virginia, and Wisconsin, alongside Ohio's newly enacted comprehensive framework, each imposing its own combination of disclosure, licensing, or conduct requirements rather than following one uniform national model.

Wisconsin was the first state to require automatic disclosure of funding agreements, adopting a statute in 2018 requiring parties to disclose the existence of a litigation funding agreement, without a request being necessary, in civil actions. Montana followed with a broader 2023 statute covering any civil action, adding enumerated prohibitions on funder conduct and limits on the percentage of a recovery a funder may take, reflecting a more comprehensive regulatory approach than a disclosure-only requirement.

Indiana and Louisiana took a related but distinct approach, making funding agreements expressly subject to discovery in litigation while separately banning funder control over litigation and settlement decisions — addressing the transparency question through the discovery process rather than an automatic filing requirement, while West Virginia and Indiana also directly regulate funder conduct, including restrictions on a funder's authority over the filing and prosecution of claims.

Ohio enacted the most sweeping recent framework. House Bill 105, signed into law in mid-2026, repeals Ohio's prior nonrecourse funding statute and replaces it with a comprehensive scheme covering both consumer legal funding and commercial litigation financing agreements. The law requires litigation finance companies to register with the Ohio Attorney General, imposes detailed contract-disclosure requirements for consumer funding agreements — including total funds provided, all fees and charges, the maximum amount owed from proceeds, and a ten-day cancellation right — prohibits funders from directing litigation strategy, settlement decisions, attorney selection, or expert witness choices, bans certain referral-fee arrangements with attorneys and medical providers, and caps certain one-time service fees. Notably, the Ohio framework does not require disclosing the funding relationship to the court during the litigation itself; contracts become public only after the case resolves.

For a funder or claimant operating across multiple states, the practical challenge is that these statutes are not harmonized: some require disclosure to the court or opposing party during the case, others require only registration and consumer-facing contract disclosures with no in-case court filing at all, and the substantive conduct restrictions — caps on fees, prohibitions on referral arrangements, limits on funder control — vary by state in ways that require a jurisdiction-by-jurisdiction compliance review rather than a single national template, distinct from the common-law champerty analysis addressed in our companion piece on that doctrine's state-by-state status.

Two broad regulatory philosophies are visible across these statutes. Wisconsin and Montana represent a transparency-first model, built around requiring the funding relationship to be disclosed as a matter of course so the court and opposing party know it exists, without necessarily imposing extensive substantive limits on the funder's conduct or pricing beyond specific caps. Ohio's new framework, by contrast, represents a consumer-protection-first model for the consumer segment of the market, layering registration, detailed contract-disclosure content requirements, referral-fee prohibitions, and fee caps on top of a narrower court-facing disclosure obligation than Wisconsin's or Montana's approach requires. A funder or claimant operating nationally needs to recognize that these are not simply different degrees of the same regulatory approach, but structurally different regulatory philosophies that happen to target the same underlying industry.

For commercial litigation financing specifically, as distinct from consumer legal funding for individual plaintiffs, most of these statutes apply a lighter regulatory touch or, in some cases, largely exempt commercial transactions above a certain size or involving a business rather than a consumer, on the theory that a sophisticated commercial counterparty needs less statutory protection than an individual consumer negotiating a personal injury advance. Ohio's HB 105 explicitly distinguishes between consumer legal funding and commercial litigation financing agreements in its own definitions, applying different specific requirements to each category rather than a single undifferentiated standard, a distinction other states' statutes draw with varying degrees of clarity and that should be confirmed carefully for any specific transaction rather than assumed from a statute's general reputation.

Operating compliantly across this patchwork typically requires a funder to maintain a living compliance matrix, tracking not just which states currently have a funding-specific statute but the specific renewal cycle for any required registration, the contract-disclosure language each statute mandates, and any state-specific caps or prohibited terms that must be reflected in that state's version of the funding agreement. Because statutes like Ohio's HB 105 impose affirmative registration and periodic reporting obligations rather than a one-time compliance check at formation, this matrix is a recurring operational function rather than a static legal memo produced once and filed away. For a claimant or firm evaluating a funder, a useful practical signal is whether the funder can readily produce evidence of current registration in the relevant state and a contract that already reflects that state's specific mandated disclosures — including a cancellation right where one is required — rather than a generic template the funder represents as compliant without being able to point to the specific provision satisfying each requirement.

Claimants and firms evaluating a funding proposal in a state with its own disclosure or licensing statute should ask, as a matter of course, to see the funder's current registration status and confirmation that the proposed agreement's specific disclosure language has been reviewed against that state's requirements, rather than assuming compliance because the funder operates nationally. This is a low-cost diligence step that surfaces a compliance gap before signing rather than after, when unwinding a non-compliant term is considerably more disruptive.

Sources: Wis. Stat. § 804.01(2)(bg) (2018 disclosure requirement); Mont. Code Ann. tit. 31, ch. 5, pt. 8 (2023); Ind. Code § 24-12 et seq.; La. Rev. Stat. § 9:3141 et seq.; Ohio H.B. 105 (signed into law 2026), amending and replacing Ohio Rev. Code § 1349.55. State statutes in this area change frequently; current filing and compliance obligations should be confirmed against each state's current code.

Criterica Capital confirms the specific statutory regime governing each matter's jurisdiction before structuring an agreement, and registers or licenses where a state requires it — see our State Licensing page for jurisdiction-specific detail. Firms and claimants with questions about a specific state's requirements can contact our institutional team.

Discuss your matter with our institutional team.