The proposed bill would update current statutes by introducing new consumer protection requirements for litigation financing agreements. Specifically, it would prohibit litigation financiers from making decisions regarding the course of action or settlement in a case, ensuring that the named party and their counsel retain full control over litigation strategy. The bill also mandates that courts consider prior disclosures of litigation financing when assessing class representation in class actions or multidistrict litigation. Additionally, it requires litigation financiers to disclose any commissions or referral fees paid to legal counsel or healthcare providers, with acknowledgment from the potential borrower before entering into a financing agreement.

Moreover, the bill would remove existing obligations for parties to disclose certain information related to litigation financing agreements and eliminate the ability to seek discovery regarding these agreements. It specifies that only the Attorney General or involved parties can challenge the legality of financing agreements under the Arizona Consumer Fraud Act. The bill also introduces new definitions related to litigation financing and establishes that agreements entered into in violation of the new requirements are voidable. The provisions would apply to civil actions initiated after the effective date of the law, set for January 1, 2026.