This bill establishes comprehensive regulations for litigation financing in South Dakota, defining essential terms such as "consumer," "litigation financer," and "litigation financing contract." It requires that all entities engaging in litigation financing obtain a money lender's license and adhere to specific operational standards, including maintaining good standing and proper documentation. The bill also mandates that all documents submitted to the Division of Banking be public records and prohibits practices such as paying referral fees or influencing civil action handling. Additionally, it imposes fiduciary duties on litigation financers in class action cases to ensure transparency and accountability.

Moreover, the legislation requires litigation financing contracts to include disclosures about cancellation rights, maximum recoverable amounts, and consumer rights. Legal representatives must disclose any financial interests or relationships with litigation financers to all parties involved, including the court and class members, who can request copies of the financing contracts. The bill holds litigation financers jointly and severally liable for costs or sanctions imposed on consumers and states that any violations will render financing contracts unenforceable. These provisions will apply to civil actions or administrative proceedings initiated on or after July 1, 2025.