The "Litigation Financing Transparency Act" aims to enhance transparency in litigation financing by establishing clear definitions and requirements for litigation financiers and funded consumers. Key provisions include mandatory disclosures that legal counsel must provide to all parties involved in an action regarding any litigation financing agreements. This includes details about the financiers, their relationships with legal counsel, and any foreign entities involved. The act also prohibits litigation financiers from making decisions about the course of an action, paying referral fees, or assigning rights to litigation financing agreements.

Additionally, the act mandates that litigation financiers indemnify funded consumers against adverse costs or sanctions resulting from the litigation, except in cases of intentional wrongdoing by the consumer. Any litigation financing agreement that violates the act will be deemed void, and violations will be classified as unlawful acts under the Unfair Practices Act. The provisions of this act will apply to civil actions and administrative proceedings initiated on or after its effective date of December 31, 2025.