FOR IMMEDIATE RELEASE
Contact: Chad Heinrich, Arizona State Director, ch@chadheinrich.com
or Tony Malandra, Senior Media Manager, anthony.malandra@nfib.org

PHOENIX, Ariz., March 25, 2025—Arizona’s leading small business association today called on members of the House Judiciary Committee to follow their Senate counterparts’ lead in expeditiously passing Senate Bill 1215 when it comes up for a hearing tomorrow.

“At issue is whether the litigation-financing industry can remain hidden from public and private scrutiny forever,” said Chad Heinrich, state director for NFIB in Arizona. “It should be an outrage to everyone that you’re not allowed to know all the people suing you.”

Reports Bloomberg Law, “In a nutshell, litigation finance is when a third party invests in a lawsuit in exchange for a share of the profit. The idea is that a good legal claim is like an asset. It’s worth money, but there’s risk. The case is worth money only if you win in court. So if you lose, investors are out all their money.

“According to one recent study, there are as many as 40 funders. Together they have about $10 billion in capital. In the past year alone, they’ve spent close to $2.5 billion investing in cases. That growth has caught regulators, lawmakers, and big law firms off guard. In many ways, the world of litigation finance is still the Wild West. ‘Currently there aren’t any regulations or laws that directly regulate litigation funding at all,’ [University of Iowa professor Maya] Steinitz said.”

Among other stipulations, Senate Bill 1215 states, “A litigation financier may not direct or make any decisions with respect to the course of action that is subject to a litigation financing agreement or any settlement or other disposition thereof, including decisions concerning appointing or changing counsel choice of or use of expert witnesses and litigation strategy.”

SB 1215 passed the Senate on a 27-1 vote March 13. Its first stop in the House is tomorrow, March 26, in the Judiciary Committee. In an Action Alert sent to its Arizona members asking them to contact their legislators, NFIB pointed out, “Predatory lawsuits have become big business for third-party lenders looking to cash in on speculative legal action, hoping for one big payday. These lawsuits can devastate small businesses like yours, dragging you into costly, never-ending legal battles. SB1215 will bring critical transparency and accountability to litigation financing and ensure that when a small business is sued, it’s clear who is funding the litigation, and who stands to benefit from its outcome.”

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Keep up with the latest Arizona small-business news at www.nfib.com. Follow us on X @NFIB_AZ.

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For more than 80 years, NFIB has been advocating on behalf of America’s small and independent business owners, both in Washington, D.C., and in all 50 state capitals. NFIB is a nonprofit, nonpartisan, and member-driven association. Since our founding in 1943, NFIB has been exclusively dedicated to small and independent businesses and remains so today. For more information, please visit nfib.com.

NFIB Arizona
602-263-7690
NFIB.com
X: @NFIB_AZ