The "Third-Party Litigation Funding Transparency Act" seeks to regulate third-party litigation funding by establishing clear guidelines for funding companies and attorneys. Key provisions include mandatory disclosures in consumer contracts, which must be clearly written and detail the funded amount, itemized charges, and payment schedules. The bill prohibits litigation funding companies from paying referral fees to attorneys or influencing legal claims, ensuring that decision-making remains with the claimant and their attorney. Additionally, it requires litigation funding companies to register, pay fees, and face civil fines for non-compliance, while contracts must include a written acknowledgment from the consumer's attorney confirming their review of the disclosures.

The legislation also imposes restrictions on attorneys, such as prohibiting them from having financial interests in funding companies and requiring written consent from consumers before disclosing confidential information. Contracts must be based on predetermined amounts rather than a percentage of recovery, and consumers are obligated to disclose any funding agreements. The bill outlines registration requirements for funding companies, including a $10,000 application fee and a compliance bond, while also mandating annual reporting to the department of insurance and financial services. Violations can lead to significant fines and forfeiture of the right to recover funded amounts, ultimately aiming to enhance transparency and protect consumers in litigation funding arrangements.