North Carolina HB 315: Prohibit Litigation Investments/Amend Workers' Compensation Benefits.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2026-14
HOUSE BILL 315

*H315-v-6*
AN ACT TO PROHIBIT LITIGATION INVESTMENTS IN THE CIVIL JUSTICE SYSTEM
AND TO AMEND THE WORKERS' COMPENSATION ACT TO INCREASE CERTAIN
BENEFITS UNDER THE SCHEDULE OF INJURIES.

The General Assembly of North Carolina enacts:

PART I. PROHIBIT LITIGATION INVESTMENTS
SECTION 1. Chapter 66 of the General Statutes is amended by adding a new Article
to read:
"Article 52.
"Prohibit Litigation Investments Act.
"§ 66-511. Short title.
This Article may be cited as the Prohibit Litigation Investments Act.
"§ 66-512. Definitions.
The following definitions apply in this Article:
(1) Civil proceeding. – A civil action, arbitration, mediation, administrative
proceeding, or other proceeding to resolve a civil legal claim.
(2) Immediate family member. – Defined in G.S. 53-244.030.
(3) Litigation investment. – The provision of money, whether as a direct payment,
advancement, loan, investment, or otherwise, for the fees, costs, and expenses
of or related to a pending or potential civil proceeding in exchange for a right
to receive repayment or other consideration that is contingent in any respect
on the outcome of the pending or potential civil proceeding. The term does
not include any of the following:
a. The provision of legal services on a contingency basis in accordance
with the North Carolina Rules of Professional Conduct.
b. An attorney or law firm's advancement of costs and expenses in
accordance with the North Carolina Rules of Professional Conduct.
c. An insurer or other entity's contractual obligation to indemnify or
defend a party to a civil proceeding.
d. The provision of money to or by a nonprofit organization for the fees,
costs, and expenses of a civil proceeding commenced by the nonprofit
organization on behalf of itself or its members so long as any
repayment amount is limited to the original amount plus reasonable
interest.
e. The provision of money to or by a nonprofit legal services organization
for the pro bono, cost-free representation of a client in a civil
proceeding so long as any repayment amount is limited to the original
amount plus reasonable interest.
f. A direct loan to a party, law firm, or attorney so long as repayment of
the loan is not contingent on the outcome of any civil proceeding.

Page 2 Session Law 2026-14 House Bill 315
g. The provision of money or other financial support to a party for
personal and household expenses during the pendency of a civil
proceeding so long as the money or financial support is not used for
the fees, costs, and expenses of the civil proceeding.
h. The provision of money or other financial support to a party for fees,
costs, and expenses of a civil proceeding so long as the source of the
money or financial support does not receive a right to any portion of
the judgment, settlement, or other monetary relief the party recovers
in the civil proceeding or any other right to receive repayment or other
consideration that is contingent in any respect on the outcome of the
civil proceeding.
i. An immediate family member's provision of money or other financial
support to a party for fees, costs, and expenses of a civil proceeding or
for personal and household expenses during the pendency of a civil
proceeding, regardless of whether the immediate family member
receives a right to any portion of the judgment, settlement, or other
monetary relief the party recovers in the civil proceeding or any other
right to receive repayment or other consideration that is contingent in
any respect on the outcome of the civil proceeding.
"§ 66-513. Prohibition on litigation investment.
It is unlawful for a person to engage in litigation investment in this State or to furnish
litigation investment to a party or counsel of record in a civil proceeding in this State.
"§ 66-514. Enforcement; penalties; remedies.
(a) A contract in violation of this Article is void.
(b) The Attorney General may bring an action to enjoin violations of this Article. In this
action, the court may also impose a civil penalty of up to fifty thousand dollars ($50,000) for
each violation of this Article.
(c) A person injured by a violation of this Article may bring an action to recover damages
and is entitled to elect at judgment between common law damages as measured by the trier of
fact and statutory damages as measured by treble the amount of the full potential litigation
investment contemplated by the investor. The injured person is also entitled to an award of court
costs and reasonable attorneys' fees.
(d) In an action arising under subsection (b) or (c) of this section, a person that has
engaged in the business of litigation investment or furnished litigation investment to a party or
counsel of record in a civil proceeding in this State has purposefully availed itself of the privileges
of conducting business in this State and is subject to suit in this State, whether or not the person
is transacting or has transacte