The "Litigation Financing Transparency Act" aims to enhance transparency in litigation financing by establishing clear definitions and mandatory disclosure requirements for litigation financiers and legal counsel. Key provisions include the definition of terms such as "litigation financier," "funded consumer," and "litigation financing agreement." The act prohibits litigation financiers from making decisions regarding the course of an action, paying referral fees for client acquisition, or assigning rights to litigation financing agreements. Additionally, it mandates that legal counsel must provide copies of litigation financing agreements to all parties involved within a specified timeframe and disclose any relationships with litigation financiers.

The act also includes protections for funded consumers, requiring litigation financiers to indemnify them against adverse costs or sanctions resulting from the litigation, except in cases of intentional wrongdoing. Any litigation financing agreement entered into in violation of this 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.