The proposed bill in South Dakota establishes comprehensive regulations for litigation financing, defining essential terms such as "consumer," "litigation financer," and "litigation financing contract." It requires that all individuals or entities involved in litigation financing obtain a money lender license and adhere to specific operational standards, including maintaining good standing and providing ownership details. The bill also mandates that all documents submitted to the Division of Banking be public records and prohibits practices like paying referral fees or influencing civil action management.

Additionally, the bill outlines necessary disclosures within litigation financing contracts, including cancellation rights and maximum recoverable amounts, while ensuring that legal representatives disclose any financial ties to litigation financers. It emphasizes the fiduciary responsibilities of litigation financers in class action lawsuits and establishes joint liability for costs or sanctions imposed on consumers. Any violations of the Act will render financing contracts unenforceable, and the provisions will apply to civil actions or administrative proceedings initiated after July 1, 2025.