The proposed bill in South Dakota aims to regulate litigation financing by defining key terms such as "consumer," "litigation financer," and "litigation financing." It requires that all individuals or entities involved in litigation financing obtain a money lender license and adhere to specific operational requirements, including maintaining good standing and proper documentation. The bill mandates that litigation financing contracts be written, include necessary disclosures, and cannot be altered without mutual consent from all parties. Additionally, it prohibits litigation financers from practices like paying referral fees or influencing civil action handling, while emphasizing transparency by requiring disclosure of financing contracts to relevant parties and the court.

Moreover, the bill introduces new obligations for litigation financers regarding their relationships with legal representatives of class members, including the requirement for legal representatives to disclose any connections with the financer. Class members are granted the right to request copies of financing contracts from their counsel. The legislation also establishes joint and several liability for litigation financers concerning costs or sanctions imposed on consumers and states that any violations will render financing contracts unenforceable. The provisions of this Act will apply to civil actions or administrative proceedings initiated after July 1, 2025.