What Does Georgia’s SB 69 Do to Third-Party Litigation Funding?

Alongside its 2025 tort reform, Georgia enacted a separate law, Senate Bill 69, regulating third-party litigation funding, the practice of outside investors financing lawsuits in exchange for a share of any recovery. The law adds registration, disclosure, and foreign-adversary restrictions, and it takes effect in two stages that are easy to confuse. This guide explains what third-party litigation funding is, what SB 69 regulates, its two effective dates, the penalties, and the effect on cases.

What Third-Party Litigation Funding Is

Third-party litigation funding (sometimes called litigation financing) is an arrangement in which an outside party, such as a hedge fund, private equity firm, or specialized financier, provides money to support a lawsuit. In exchange, the funder receives a portion of the recovery if the case succeeds. The funder is not a party to the case and traditionally has operated largely outside the view of the court and the opposing side.

This practice has grown substantially and can be significant in larger cases, including product liability and other high-value litigation. Supporters argue it helps plaintiffs who could not otherwise afford to pursue meritorious claims; critics raise concerns about transparency and about who is influencing or profiting from litigation. SB 69 is Georgia’s response, aimed at regulating, not banning, the practice.

What SB 69 Regulates

SB 69 imposes several requirements on litigation financiers operating in Georgia. It requires funders to register with the Georgia Department of Banking and Finance and to disclose information including ownership and certain affiliations. It bars funders affiliated with a federally designated foreign adversary, or with foreign governments or sovereign wealth funds in the manner the law specifies, from financing Georgia litigation, an anti-foreign-influence feature the state emphasized.

The law also makes litigation funding agreements more transparent within cases. For agreements providing $25,000 or more in funding, the existence and terms of the agreement are subject to discovery by the opposing side, though the law provides that disclosure does not by itself make the agreement admissible in evidence at trial. SB 69 further restricts funders from controlling the litigation, such as directing strategy, settlement decisions, or the choice of counsel, and addresses other potential conflicts, including limits on a funder’s share of the recovery.

The Two Effective Dates

A crucial and easily confused feature of SB 69 is that it takes effect in two stages. The discovery provision, allowing the existence and terms of qualifying funding agreements to be discovered, took effect on April 21, 2025, the same day the law was signed, and applies to agreements entered or actions commenced on or after that date. So the discoverability of funding agreements has been in force since April 2025.

The core regulatory requirements, however, took effect later. The registration requirement, the foreign-adversary prohibitions, and the related regulatory framework became effective January 1, 2026. This means that while funding agreements became discoverable in April 2025, the obligation for funders to register with the state and the prohibitions on foreign-adversary funding did not begin until the start of 2026. Conflating these dates is a common error; the discovery rule and the registration regime have different start dates.

Penalties

SB 69 carries significant penalties for violations of its requirements. Engaging in litigation financing in violation of the law can expose a violator to serious consequences, including criminal liability. Reported penalties include felony-level exposure, with imprisonment in the range of one to five years, and fines up to $10,000, reflecting the seriousness with which the law treats noncompliance, particularly the foreign-adversary prohibitions.

In addition to criminal exposure, the law affects the financing arrangements themselves and the funder’s position in litigation. Among other consequences, funders that provide $25,000 or more can be exposed to joint and several liability for certain sanctions or costs, and noncompliant arrangements can be unenforceable. The combination of criminal penalties, financial exposure, and contract consequences gives the law substantial teeth.

Effect on Cases

For litigants, SB 69 changes the landscape in a few practical ways. Because qualifying funding agreements are discoverable, opposing parties can learn whether outside capital is backing a case and on what terms, which can affect litigation and settlement dynamics. The restrictions on funder control reinforce that the plaintiff and counsel, not the funder, must drive the case.

It is also worth noting a connection to the related tort reform. SB 69 included a provision clarifying the timing of the seatbelt-evidence change introduced by the 2025 reform, specifying that the seatbelt rule applies to actions commenced on or after the effective date, which is addressed in the posts on comparative fault and SB 68. For most injured people, the central practical points are that litigation funding is now more transparent and regulated, that funders cannot control the case, and that the registration and foreign-adversary rules became fully operative at the start of 2026. Anyone considering or using litigation funding in Georgia should account for these requirements, and because this is a new and detailed regulatory area, the specifics should be reviewed carefully.

Key Takeaways

• SB 69 regulates (but does not ban) third-party litigation funding, adding registration, disclosure, foreign-adversary restrictions, and limits on funder control.
• Funding agreements of $25,000 or more are subject to discovery, though disclosure does not by itself make them admissible at trial.
• The law takes effect in two stages: the discovery provision began April 21, 2025, while registration and the foreign-adversary prohibitions began January 1, 2026.
• Violations can carry serious penalties, including felony-level exposure (roughly one to five years), fines up to $10,000, and consequences for the funding arrangement itself.

This article provides general information about Georgia law and is not legal advice. Statutes and court decisions change, and how the law applies depends on the specific facts of a situation. For advice about a particular matter, consult a licensed Georgia attorney.