Georgia Senate Bill 69 and the Future of Litigation Funding

Erick

Welcome to Episode 3 of the Litigation Funding Podcast! I'm Erick Robinson, a partner and Co-Chair of the Patent Trial & Appeal Board Practice at Brown Rudnick in Houston. Thanks for joining me today!

Erick

Today, we're diving into a piece of legislation that’s stirring up serious concerns in the world of litigation funding—Georgia Senate Bill 69, or as it’s officially called, the Georgia Courts Access and Consumer Protection Act. Now, that title may sound pro-consumer, but when you dig deeper, well, it’s not quite that simple. This bill introduces some sweeping changes that could reshape who has access to the courts, and, spoiler alert, it's not always in the best way.

Erick

Before we get into the discussion, I want to remind you that, as always, the views and opinions expressed in this podcast do not necessarily represent those of Brown Rudnick. This podcast is presented for informational and educational purposes only. Now let's get into the Georgia Bill.

Erick

Let’s start with the basics. Litigation funding, as many of you likely know, is when a third party provides financial backing to plaintiffs in exchange for a share of any financial recovery. It’s basically a way for people or small businesses without deep pockets to take on bigger entities—corporations, occasionally even Goliaths, if we’re being dramatic—and actually stand a chance in court. It’s a global industry valued at $11.3 billion, with growing prominence here in the U.S. And for small business owners, individual inventors, or anyone going toe-to-toe with powerful opponents, litigation funding can be a lifeline.

Erick

Now, Georgia Senate Bill 69, it seems, takes aim squarely at this practice. The bill mandates that funders register with the state and submit detailed ownership disclosures, including down to 5% ownership stakes, histories of key personnel, and, frankly, an almost exhaustive account of their operations. And to make matters even more complicated? All of this gets dumped into the public record. That’s transparency taken to the extreme—it’s more like a public airing of everything you've ever done.

Erick

But that’s not all. The bill also introduces joint and several liability. What does that mean? Well, funders could find themselves liable for sanctions or costs imposed on plaintiffs—costs that could arise from the plaintiffs’ behavior, even if the funders themselves weren’t directly involved. It’s like co-signing someone’s car lease, except if they damage the car, you’re somehow fully responsible. Predictably, this kind of open-ended liability is enough to send funders packing from the Georgia market. And who does that hurt most? The little guys.

Erick

The legislation further layers on restrictive provisions: mandatory contract language, rules governing what funders can advertise, and even bans on assigning or securitizing agreements. Oh, and all litigation funding agreements become subject to discovery during lawsuits, which, let’s be real, only adds complexity and more delays to already slow-moving court cases. It’s a lot, isn’t it? Almost like the bill is actively trying to suffocate this industry into nonexistence.

Erick

But here’s the emotional core of the issue: the direct impact on those who rely on litigation funding. Independent inventors, for example—these folks already face an uphill battle with patent litigation often costing millions. Without funding, most are left without the resources to even bring their claims to court, leaving them vulnerable to corporate players who, let’s say, aren’t above infringing on intellectual property. And when funding dries up, so does access to justice for many of these inventors and small businesses. It’s a harsh reality, yet one that’s easy to overlook in the abstract language of a bill.

Erick

At its core, this legislation feels less like a fine-tuning of consumer protections and more like a complete overhaul that tilts the scales of justice—further away from economic equity. The irony isn't subtle: the bill claims to protect consumers, yet for most, it places justice even further out of reach.

Erick

Alright, let’s get into the nitty-gritty of what this bill means for patent litigation, because the stakes here? They’re sky-high. Imagine you’re an independent inventor with a groundbreaking idea—a patent that could disrupt the market. And then, a major corporation comes along, infringes on your patent, and basically dares you to fight them in court. Now, here’s the problem: patent litigation can easily cost millions of dollars. For small inventors or startups, that’s just not feasible without financial backing.

Erick

This is where litigation funding has been nothing short of a game-changer. It levels the playing field—or at least gets us closer to one. But if Georgia Senate Bill 69 goes through, well, the calculus changes pretty quickly. Right now, funders typically expect returns of around twenty to twenty-five percent for backing high-risk litigation. Under the bill’s restrictions, those returns could drop to eight to twelve percent. And for funders? That’s just not enough to justify the risks. Suddenly, they’re much less interested in taking on these David-versus-Goliath cases.

Erick

Without funding, those cases don’t just get harder—they disappear entirely. Think about it: there are already success stories where small inventors used litigation funding to win against massive corporate defendants. Cases where courts forced companies to pay for infringement, restoring some sense of justice. Without that financial support, those victories? They never would’ve happened. And that’s not just unfortunate—it creates systemic barriers to innovation. It’s the kind of thing that discourages inventors from even bothering to defend their rights.

Erick

But here’s something to consider: do we even need these new rules? The existing system already has guardrails. Courts, for example, have the authority to require disclosure of litigation funding if it’s relevant to the case. And attorneys? They’re bound by ethical obligations not to let funders interfere with their professional judgment. The Georgia Rules of Professional Conduct make it crystal clear: lawyers work in the best interests of their clients, not the funders. So the question is, are we really in a Wild West situation here, or is this bill just creating problems where none really exist?

Erick

And let me not forget the administrative burden. We’re talking about ongoing registration and operational costs for funders—costs that will likely push smaller entities out of the market altogether. For independent inventors or small business owners relying on those funders, that’s just another door slamming shut. Oh, and let’s not skip over the joint and several liability clause. That makes funders responsible for sanctions or costs imposed on plaintiffs, even when funders themselves have done nothing wrong. It’s like asking someone else to hold the bag for your mistakes. Hardly an enticing prospect for investors.

Erick

So, what’s the upshot? Senate Bill 69 doesn’t just increase regulatory hurdles; it changes the entire risk equation for funders, creating a disincentive to back the very cases that need it the most. The result? Independent inventors and small businesses lose crucial access to justice, while larger entities continue to dominate the legal landscape unabated.

Erick

Let’s break this down by case type, because, honestly, Senate Bill 69 isn’t gonna hit all kinds of litigation the same way. It’s not a one-size-fits-all situation here. So first up? Patent litigation. And let me just tell you, this is where the impact is gonna feel like a sucker punch.

Erick

Patent cases are notoriously expensive—seriously, think two to five million dollars just to get through trial. For smaller inventors or startups, that’s already a massive hurdle. Now, most funders in these cases expect returns in the twenty to twenty-five percent range. But under the new restrictions? We’re looking at returns dropping all the way to, what, eight to twelve percent? And funders, well, they’re not exactly in the business of taking massive risks for razor-thin margins. So, bam, they’re effectively out of the game before it even starts.

Erick

And this isn’t just theoretical. There are actual examples of independent inventors using litigation funding to defend their patents and win against huge corporations. Without that funding, those wins just—poof—don’t happen. And really, it’s not just inventors who lose here. It’s innovation itself. Why fight to protect your groundbreaking idea if you know you can’t afford the battle, right?

Erick

Now, let’s talk about mass tort and complex litigation—things like big environmental lawsuits or product liability cases. These cases? They’re resource vacuums. You’ve got expert witnesses, endless discovery battles, trials that drag on for years. It’s like a money pit. For funders, the return on investment is already tricky. But then you add the joint and several liability from this bill? It’s a big neon sign that says, “Invest here at your own peril.” Predictably, a lot of funders are just gonna, well, steer clear entirely.

Erick

So who does that hurt? The plaintiffs, obviously. These are often victims of massive harms—think defective products, toxic spills. Without funding, these cases never even make it to court. And the corporations causing the harm? They get to sidestep accountability entirely, which, let’s be honest, isn’t exactly justice, is it?

Erick

Commercial disputes are next on the list. Initially, these might look like the safer, less expensive cases to fund. And sure, they do cost less than patent or mass tort cases—maybe seven hundred thousand to a couple million bucks tops. But the bill’s restrictions still hammer down returns here, too, and—well—when those profits shrink, funders get pickier. The unfortunate twist is that small businesses are the most affected. When you’re a local retailer taking on a major supplier for breach of contract, funding might’ve been your only way to get through court. Without it? You’re just up against a corporate juggernaut with no real shot at leveling the playing field.

Erick

So, yeah, the market impact of Senate Bill 69 isn’t some abstract economic shift—it’s a direct hit to those who actually need the justice system to work for them. And the bigger players? They’ll be just fine. They’re, you know, sitting in the driver’s seat, benefiting from the barriers this bill creates for everyone else.

Erick

Alright, let’s take a step back here and ask a basic question: do we really need the changes Senate Bill 69 is proposing? Because, as it stands, the tools we already have in place seem, well, more than capable of handling the issues it claims to address. Let’s break this down.

Erick

First off, the courts aren’t exactly powerless when it comes to overseeing litigation funding. Federal and state courts already have significant authority under the Federal Rules of Civil Procedure. If funding arrangements are actually relevant to a case, judges can demand disclosure. And believe me, they don’t hesitate to step in when something’s off. It's not like we're dealing with a procedural free-for-all here.

Erick

Now, let’s talk about attorneys. Georgia’s Rules of Professional Conduct are crystal clear: lawyers are obligated to act in the best interest of their clients—period. Rule 5.4 flat-out prohibits funders or anyone else from controlling the decisions a lawyer makes in a case. That’s already a rock-solid safeguard. I mean, if someone’s ignoring those rules, the issue isn’t a lack of regulation; it’s enforcement. And for the record, these ethical boundaries have held up just fine for decades.

Erick

But that’s not all. The funding industry itself has developed its own best practices over the years. It’s not like these funders are out here flying blind. Most comply with standards requiring claimants to have independent counsel, and their agreements explicitly state that funders don’t interfere with legal strategy or settlement decisions. These are market-driven solutions that strike a balance between transparency and access.

Erick

So, what is Senate Bill 69 trying to fix, exactly? The courts have authority. The lawyers have rules. The market has evolved checks and balances. What we’re looking at isn’t a lack of oversight—it’s redundant regulation that could do more harm than good. By introducing heavy-handed requirements, this bill risks pushing funders out of the market entirely, leaving countless plaintiffs without the support they need.

Erick

And if we’re being honest, these systems aren’t just sufficient—they’re time-tested. They hold up under scrutiny without throwing unnecessary roadblocks in the way. At a certain point, you have to wonder, are we regulating to solve a real problem, or are we just creating problems for the sake of looking busy?

Erick

Alright, let’s zoom out for a minute because Georgia isn’t the only player in this game. There are jurisdictions out there that have handled litigation funding more, well, thoughtfully. Instead of overregulation that sends funders running for the hills, they've managed to strike a balance. So, how do they do it?

Erick

Let’s start with the United Kingdom. Over there, litigation funding operates under a self-regulatory framework led by the Association of Litigation Funders, or ALF for short. The ALF Code of Conduct ensures funders keep enough capital on hand, don’t walk away from cases without good reason, and—this is key—make it clear that claimants maintain control over decisions like settlements. Courts still have oversight when necessary, but they don’t micromanage the process. It’s flexible, and honestly, it works.

Erick

Then there’s Australia. They take a slightly different route, requiring funders to register as managed investment schemes. Now, that might sound like a bureaucratic headache, but the key difference is that their system emphasizes disclosures without making them, you know, so invasive that funders feel exposed or at risk. Courts can tweak funding agreements if they seem unfair, but there’s no equivalent to Georgia’s joint and several liability provision—thankfully.

Erick

Now, let’s circle back to the United States. States like Wisconsin and Maine have taken a more moderate approach. Wisconsin, for example, mandates straightforward disclosures between funded parties and claimants, without broadcasting every contract detail to competitors or the public. And Maine? They cap funding rates for consumer litigation but stop short of imposing punitive liabilities or unnecessarily rigid requirements. These state-level models show it’s entirely possible to protect litigants without crushing the funding market altogether.

Erick

So, what’s the lesson here? Regulation doesn’t have to be, let’s say, ‘one-size-fits-all.’ There are smarter, more targeted ways to provide oversight without dismantling a system that’s, frankly, indispensable for many people trying to access justice.

Erick

Alright, so let’s take a moment and think about the real-world effects of Senate Bill 69. And when I say “real-world,” I mean the people who bear the brunt of these changes—individuals, small businesses, and those tied up in the most challenging lawsuits like mass tort cases. Because, let’s face it, these aren’t just tweaks to the system—we’re talking about barriers that could reshape the legal landscape entirely.

Erick

Let’s start with individuals. For them, litigation funding is often the only lifeline they have to file claims against big corporations. Imagine being harmed by, say, a defective product or environmental contamination. Cases like that require high-end expert analysis, mountains of documentation, and court costs that rack up faster than a New York cab meter. Without funding? Well, a lot of claims just die before they’re even filed. And the corporations responsible? They skate by without ever being held accountable.

Erick

And let’s not overlook small businesses—they’re equally at risk here. Picture a family-owned company that’s been wronged by a multi-billion-dollar corporation. The legal costs alone could bankrupt them before the case even gets to court. Litigation funding is how these smaller players level the field—or at least try to. But this bill? It slashes the funding opportunities to a fraction of what they are now, leaving small businesses with, frankly, no good options. As far as David versus Goliath battles go, it’s like taking David’s slingshot away and handing Goliath a shield on top of it.

Erick

And then there’s the mess that is mass tort litigation. Let’s say we’re dealing with victims of toxic spills or faulty medical devices. These lawsuits? They’re not cheap to run. We’re talking millions—experts, discovery, years of trial prep. Without funding, you basically shut the door on claims like this altogether. It’s harsh, but it’s the truth: fewer funders means fewer cases, period. And the corporations who stand on the other side of these lawsuits? They get to keep dodging liability, while the victims are left holding the bag.

Erick

Now, the real irony here is that all these changes are supposedly about consumer protection. But the consumers they’re claiming to protect? They’re the ones losing out. Senate Bill 69 places access to justice further out of reach for the very people who need it most, all while making it easier for larger, well-funded players to dominate. You’ve got to wonder if “protection” is really what’s at play here.

Erick

Alright, let’s put Senate Bill 69 under the microscope and ask the hard question: who actually benefits from this, and who gets left in the dust? Because, let’s face it, most legislation has winners and losers, and this bill? No exception.

Erick

Let’s start with the winners, shall we? Big corporations—they’ve got to be grinning ear to ear right now. Why? Well, fewer funding options mean fewer funded plaintiffs. So, if you’re a corporate defendant with deep pockets? This is basically a dream come true. You can drag cases out, pile up legal costs, and outlast opponents who can no longer afford to keep going. It’s like giving Goliath better armor while taking stones away from David. Not exactly a fair fight, is it?

Erick

And let’s not forget the insurance companies. For them, this is a golden ticket. The fewer claims that make it to court, the fewer payouts they have to make. Honestly, predictable wins for them, but at what cost? You’ve got to wonder if their bottom line is worth leaving legitimate claims on the cutting-room floor.

Erick

Now, who’s on the losing side? Well, where do I start? Individuals with legitimate claims against big corporations? They’re struggling without financial backing. Small businesses trying to stand up against unfair practices? They’re, well, totally outmatched. And independent inventors? Oh boy, for them, this bill is like a nightmare.

Erick

Take inventors and startups, for example. Many of them rely on litigation funding to protect their intellectual property. Without it, enforcing their patents becomes borderline impossible. And corporate infringers know this. Some of them practice what’s called “efficient infringement,” which is a fancy way of saying they ignore the rules because they know most people can’t afford to fight back. It’s... it’s demoralizing, really.

Erick

And small businesses? Same story. Without funding, how does a local entrepreneur even put up a fight against a giant corporation with an entire legal department on standby? Answer: they usually don’t. It’s a cold, hard truth that this bill, if passed, could end a lot of legal battles before they even start.

Erick

Then there’s mass tort cases—the really big ones involving environmental damage, defective products, systemic negligence. These lawsuits cost millions to see through. Without funders stepping up, well, most of them never get off the ground. And the victims? They’re left staring at an insurmountable wall while the companies responsible walk away unscathed. It’s... yeah, it’s a bleak picture.

Erick

Alright, let’s switch gears a bit and talk solutions, because we’ve spent a lot of time dissecting what’s wrong with Senate Bill 69. Now, the question is, what could a more balanced approach actually look like? How do we address legitimate concerns without, you know, setting the whole system on fire?

Erick

First up, disclosure and transparency. Now, don’t get me wrong, transparency can absolutely serve the public good, but it needs to be, well, reasonable—targeted. The current bill’s demand for funders to spill every operational secret into public records? That’s not transparency; that’s a recipe for stifling competition. Instead, why not focus on clear, client-focused disclosures? Things like explaining the terms of funding, projected costs, and potential recovery scenarios. Add an attorney sign-off to ensure all parties fully understand the deal, and boom, you’ve got meaningful transparency without the overreach.

Erick

Next, consumer protections. Look, no one wants predatory practices—nobody—but let’s not pretend those require a regulatory sledgehammer. Reasonable rate caps tailored to individual plaintiffs might make sense. But here’s the kicker: those caps need to leave room for funders to still find these cases worth pursuing, especially the complex ones. Striking that balance is tough, sure, but it’s possible if we avoid lumping all funding contracts into one rigid framework. Nuance, people, nuance.

Erick

And what about operational requirements? Right now, the bill’s demands are so extreme, small funders might as well just close up shop. Instead, why not take a more targeted approach—say, capital adequacy rules that ensure funders have the resources to back their commitments without suffocating smaller players? You don’t need an industry to be entirely dominated by a few massive funders to maintain oversight. Smaller, precise adjustments could fix this part without gutting the market.

Erick

Look, the point is that none of these measures have to be all-or-nothing. If we focus on designing laws that genuinely seek improvements—not headline-ready overcorrections—we can address concerns without derailing access to justice for individuals, small businesses, and independent inventors. Regulation doesn’t have to mean extinction.

Erick

Alright, so let’s tackle the elephant in the room—implementation. Because, let’s be honest, as it stands, the framework in Senate Bill 69 is not just overly ambitious—it’s, well, almost self-sabotaging. But the good news? We’ve got room to pivot here, starting with those registration requirements.

Erick

Right now, funders have to submit what basically amounts to a corporate history lesson—every little operational detail, including ownership thresholds as low as five percent—and, oh yeah, all of that becomes public. Now, while transparency matters, there’s a fine line between oversight and airing out proprietary secrets for competitors to ogle. One simple fix? Keep sensitive information—key financial data, funder strategies—confidential. It still affords oversight without making funders feel like they’re writing their competition a playbook.

Erick

Next up, those liability provisions. Joint and several liability? It’s—how do I put this delicately—an absolute minefield. Holding funders entirely responsible for behavior they had no part in? That’s not regulation; it’s a recipe for retreat. Instead, liability needs clear boundaries. For example, funders could be held proportionally responsible for actual misconduct they’re tied to, but not for every misstep the plaintiffs take. It’s about matching the responsibility to the role—not throwing funders under an entire legal bus for being on the periphery of a case.

Erick

Ah, and then there’s discovery. Right now, the bill wants to make all funding agreements fair game in court, regardless of relevance. Let me just say, that kind of blanket rule is asking for trouble. Instead, why not let judges evaluate funding agreements in-camera—privately—when there's an actual issue at stake? It’s straightforward and ensures discovery stays focused, without turning litigation into a fishing expedition.

Erick

Alright, let’s face it, Senate Bill 69? As it stands, it’s less about protecting consumers and more about slamming the door on everyday people who need access to justice. And for those of us paying attention, it’s clear this bill isn’t a done deal yet—there’s still room to act. So, if we’re serious about avoiding the fallout, let’s break down how we can actually make a difference here.

Erick

First, direct legislative outreach. Sounds simple, but it’s incredibly effective. Call your state representatives—email them, even. They need to hear from real constituents, people who actually understand how this bill could play out in the real world. Like, let’s be clear: lawmakers don’t always know the full impact of what they’re voting on. Hearing specific stories—successes brought about by litigation funding—well, that’s the kind of thing that can really change the narrative.

Erick

Now, let’s talk about professional associations. Whether it’s the Georgia Trial Lawyers or the Small Business Alliance, these groups carry weight. Their influence can amplify this conversation in ways that one-off voices simply can’t. So, if you’re part of an association, now’s the time to rally them. Their advocacy—backed by real-world examples—can push back against the more extreme measures of this bill, you know?

Erick

And don’t sleep on public comments or testimony. When this bill heads to committee hearings, there’s usually an open floor for input—written comments or even live testimony, if you’re up for it. I mean, the truth is, sharing how this legislation impacts actual people has a way of cutting through all the legal jargon. Keep it direct, make it emotional if you have to—whatever it takes to get their attention.

Erick

Finally—and this is key—coalition building. You’ve got small business owners, inventors, consumer advocates, even legal professionals, all affected by different pieces of this bill. By organizing across these groups, it’s possible to bring a unified front to the table. And trust me, lawmakers notice when a diverse coalition comes knocking. That’s how you build momentum. That’s how you make it impossible for them to ignore the real-world impact of this legislation.

Erick

Look, at the end of the day, this isn’t about stopping all regulation—it’s about pushing for balance. Regulation that doesn’t destroy crucial resources like litigation funding. Because the reality is, taking this tool away doesn’t just hurt plaintiffs, it tips the entire system further in favor of those who already hold all the power. And, honestly, I think we’re all ready to see a justice system that’s just a little more equitable, don’t you?

Erick

On that note, we’ll leave it here for today. Thanks for tuning in to The AI Law Podcast. Until next time, take care, stay informed, and don’t underestimate the power of your voice. Change happens when people speak up—so let’s keep the balance in play.

Erick

Thanks for joining me today! Please reach out with any questions, comments, or discussion ideas! Be well!