Ohio's lawsuit-funding disclosure law takes effect today — with a first-in-the-nation foreign-funding ban

A new Ohio law taking effect today requires anyone bankrolling a lawsuit to disclose the funding deal — and bans foreign governments, corporations, and investors from participating in litigation funding entirely, the first such ban in the nation, according to Land Line Media on Oct. 5.

The Owner-Operator Independent Drivers Association says truck drivers, motor carriers, and their insurers are getting slammed by costly lawsuits that drag on for years — and that some of those suits are being bankrolled by outside investors with no stake in the case, who put up the money in exchange for a share of any settlement or award. OOIDA argues the outside money keeps cases going longer, inflates damages, and ripples through the supply chain as higher insurance and legal costs. Tom Balzer of the Ohio Trucking Association said the setup can incentivize frivolous claims and prolong litigation. State Rep. Meredith Craig, R-Smithville, said the law brings transparency to an industry that has operated in the shadows: "For too long, foreign actors have profited off Ohio citizens and businesses by investing in our courts. That stops today."

The law applies only to state courts. About a dozen states have acted on third-party litigation funding in the past two years, and Michigan may be next: the state House passed HB5281, which would require funding deals to be disclosed and funders to register while banning kickbacks and barring foreign entities from funding suits. The bill is now in the Senate Regulatory Affairs Committee.