A Senate committee has advanced a bill aimed at increasing transparency in civil liability litigation, with strong backing from the New Jersey Business & Industry Association (NJBIA). The proposed legislation would require all parties to be informed if a private equity firm or hedge fund is financing a plaintiff's legal action against a New Jersey business.
Christopher Emigholz, NJBIA's Chief Government Affairs Officer, addressed the Senate Commerce Committee, emphasizing that while the bill does not prohibit third-party litigation funding, it seeks to address the growing trend of private equity firms using the civil justice system as an investment tool. These firms often finance numerous lawsuits by unrelated parties in exchange for a portion of any monetary awards won by plaintiffs.
Emigholz highlighted that without transparency, such third-party funded litigation can obscure potential conflicts of interest and lead to prolonged and costly legal battles for defendants. "I'm here to make sure you know that this bill is important to the entire business community," Emigholz stated. He noted that NJBIA represents thousands of businesses across New Jersey and frequently hears concerns about high costs and excessive regulations affecting the state's business climate.
The manufacturing sector is particularly interested in this bill, according to Emigholz. "We want more things made in New Jersey, invented in New Jersey and researched and developed in New Jersey," he said. Transparency regarding third-party funded litigation could improve conditions for companies looking to invest and create jobs in the state.
The bill, designated S-4374, is sponsored by Senators John McKeon (D-27) and Joseph Lagana (D-38). It was approved by the committee with four votes in favor and one abstention.
