None of the Pelvic Mesh Litigation shenanigans – criminal and otherwise – that were graphically described in Elizabeth Chamblee Burch’s recent book, The Pain Brokers (One Signal Publishers 2026), which we reviewed here, could have happened without somebody footing the bill. Those somebodies were – and are in most, if not all, mass torts – third party litigation financiers. TPLF is also behind those ubiquitous lawyer ads on late night TV.
But practically all such funders don’t want the public – and especially their litigation opponents (who are our clients) − to know who they are, how much skin they have in the game, and how much control they have over their financed litigants. We (Bexis mostly) have been involved in the effort to add a TPLF disclosure requirement with teeth to the federal rules for the past several years.
The process for amending the Federal Rules of Civil Procedure is glacial, so states have started to act on their own. We blogged here about the comprehensive TPLF regulatory framework that Georgia enacted last year. In this post we are pleased to discuss a similar effort in Ohio that was recently signed into law and will go into effect this October. The complete as-enacted statute (known as HB 105) is available here.
Unlike the current federal effort, which is limited to disclosure of TPLF contracts, and which is necessarily limited to federal cases (which includes MDLs), the Ohio effort has many substantive elements, including an outright ban on transnational TPLF. §1357.07. That provision seems to have garnered the most publicity, but the rest of the statute is actually more important to the general conduct of litigation. It may also serve as a template for other states.
First, the Ohio statute separates TPLF into “consumer” (TPLF that resembles payday lending), which involves loans of less than $400,000 to individuals, see §1357.01(F), and “commercial” (larger dollar amounts and funding directed to lawyers and law firms. See §1357.01(C). There are various exceptions for more traditional lenders, insurers, pro bono and public interest operations, contractual indemnitors, familial loans, and contingent fee arrangements with lawyers. See §1357.01(D and G). The legislature made clear it intended to regulate “a narrow range of consumer legal funding agreements and commercial litigation financing agreements as contemplated in the holding of the Ohio Supreme Court in Rancman v. Interim Settlement Funding Corp., [789 N.E.2d 217 (Ohio 2003)]” and “to preserve and reinforce the general public policy expressed in that holding against champerty and maintenance.” Id. §1357.011. Here’s what the Ohio Supreme Court held in Rancman:
Equally troubling is a champertor’s earning a handsome profit by speculating in a lawsuit and by potentially manipulating a party to the suit. . . . [A] lawsuit is not an investment vehicle. Speculating in lawsuits is prohibited by Ohio law. An intermeddler is not permitted to gorge upon the fruits of litigation. Except as otherwise permitted by legislative enactment . . . a contract making the repayment of funds advanced to a party to a pending case contingent upon the outcome of that case is void as champerty and maintenance. Such an advance constitutes champerty and maintenance because it gives a nonparty an impermissible interest in a suit, impedes the settlement of the underlying case, and promotes speculation in lawsuits.
789 N.E.2d at 221 (citation omitted). Note the “otherwise permitted by legislative enactment.” Ohio’s vigorous judicial enforcement of existing laws against champerty and maintenance was surely a catalyst for equally vigorous legislative action.
The legislature’s desire to regulate TPLF consistent with this holding explains many of the limitations imposed by the statute.
We’ll start with the “consumer” TPLF, since the statute does. In enacting this statute, Ohio plainly intended to do away with the sleazy conduct that permeated the “Pain Brokers.” First, “consumer legal funding companies” cannot do business in Ohio without registering with the state attorney general and filling out a detailed application. §§1357.011 to .02. Consumer TPLF contracts must:
- Be “completely filled in” at signing;
- Contain several “disclosures: (1) the total funds “paid to the consumer”; (2) a list of all one-time and recurring charges and how they accrue; (3) the “maximum amount” the consumer owes from litigation proceeds; (4) the “cumulative” maximum when there is more than one agreement between the parties; (5) a 10-day no-penalty cancellation period, and means to cancel; (6) an all-caps notice of the right to cancel; (7) an all-caps notice that the funder has “no role” in deciding any settlement; (8) an all-caps notice that the funder cannot control or influence the funded plaintiff’s counsel; and (9) an all-caps statement that the funding is totally non-recourse;
- The funded party’s attorney must operate solely on contingency, meaning no separate payments from the funder;
- The funded party’s attorney must ensure that “all disclosures” have been given to the funded party;
- The funded party’s attorney must ensure that the terms of the funding contract, including payments, are satisfied;
- No referral fees or any other compensation can be paid by the funder to the funded party’s counsel;
- The funded party’s counsel must “follow all applicable rules of professional conduct . . . in all aspects of the transaction.”
§1357.03. Further, all violations by the funder constitute violations of the Ohio consumer protection statute, and are so enforceable either by the funded party or by the Ohio attorney general. And in addition, any violation “renders the consumer legal funding agreement unenforceable.” Id.
A number of other TPLF shady practices, many of which occurred in “Pain Brokers,” are banned: (1) referral payments either to or from law firms and/or health care professionals; (2) false advertising; (3) referral arrangements with particular law firms and/or health care professionals; (4) not providing TPLF contract documents; (5) stacking TPLF for the same claim; (6) making or influencing litigation decisions, including settlement, counsel selection, experts, or strategy; (7) waiving any remedy; (8) paying costs or fees, including attorney fees; (9) charging penalties or excessive “service” fees; (9) attorney-owned TPLF; and (10) faked claims. §1357.04.
Attorneys representing consumer TPLF clients cannot share confidential client information without the client’s written consent and only provide the TPLF with confidential discovery information in compliance with all protective orders, court rules, and ethical requirements. Lawyers are also prohibited from having financial interests in any TPLF that lends to their clients. §1357.05(A-B).
The statute also provides for disclosure of consumer TPLF agreements to the attorney general, the public, and opponent seeking TPLF discovery. §1357.05(C-E). Disclosure of TPLF agreements to the AG must be made within 14 days of resolution of the funded matter, and the AG must then “promptly publish the contents” (with certain redactions) on a public website. Georgia’s similar requirement has already yielded public registration data. During litigation, opponents may seek discovery of TPLF agreements, as “[a]ny provision of a consumer legal funding agreement . . . that prohibits or limits discovery of the agreement or the parties to the agreement is void and unenforceable.” Id.
Now for the statute’s regulation of “commercial” TPLF. It’s much shorter. Part of that is because, as one might expect, a lot of it is similar or identical to what we just described for “consumer” TPLF, albeit with some modifications reflecting that funded parties are not just individuals. Consumer TPLF faces registration requirements, but not as detailed. §1357.08. A similar prohibition against disclosure of confidential information in violation of protective orders is imposed, as is an almost verbatim ban on TPLF interference with settlement and other litigation decisions. §1357.09(A-B). The disclosure requirements for commercial TPLF are also essentially identical. §1357.09(C-E). Unlike consumer TPLF, the statute does not ban offering or accepting referral fees. Nor are equivalent disclosures and attorney-related restrictions imposed, reflecting that the recipients are expected to be more sophisticated commercial entities. Nor are statutory violations committed by commercial TPLF subject to a private right of action under the Ohio consumer protection statute. Instead, enforcement is limited to actions brought by the state attorney general:
The attorney general may file a complaint seeking any equitable remedy, including barring a commercial litigation financier or consumer legal funding company from doing business in this state in the capacity as a commercial litigation financier or a consumer legal funding company, if the commercial litigation financier or consumer legal funding company is found by a court of competent jurisdiction to have violated this chapter.
Id. at §1357.10.
We have a couple of closing observations. First, defendants in mass torts should be making sure that all Ohio plaintiffs (and plaintiffs from other states, such as Georgia, with similarly strict TPLF regulations), are complying with those state-law TPLF requirements. State statutes like Ohio’s protect and apply to all Ohio citizens, regardless of what court their litigation is venued. Thus the Ohio, Georgia, and other state TPLF statutes apply to citizens of those states in federal MDLs and analogous state aggregated proceedings, and defendants should be on the lookout to enforce compliance, if the plaintiffs comply voluntarily.
Second, while most of these statutory provisions are substantive, those of us involved in seeking to have TPLF disclosure added to the Federal Rules of Civil Procedure will have to be careful that any federal rules disclosure requirements does not result in the nullification of even better state disclosure TPLF mandates, such as Ohio’s, by Supreme Court rulings concerning the exclusivity of the federal rules in federal court. See Berk v. Choy, 607 U.S. 187 (2026) (state medical malpractice affidavit-of-merit requirements do not apply in federal court); Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Co., 559 U.S. 393 (2010) (same for state class action limitations).