The New Jersey State Senate Commerce Committee released Senate Bill 4374 on a motion to amend following two hours of testimony and back-and-forth between business groups and plaintiff attorneys.

The measure would require disclosure of party litigation funding agreements and impose duties and reporting obligations on litigation funders; committee members described the bill as aimed at transparency in an expanding industry.

The bill’s proponents argued that outside investors and private-equity funders are reshaping litigation and can influence which claims are brought, how they are pursued and when they are settled. Aviva Wean, assistant general counsel at Johnson & Johnson, told the committee, "It is a basic transparency bill that requires disclosure to all parties in a case where money from any party litigation funder . . . is funding civil cases or portfolio of cases." Chris Emigholz of the New Jersey Business & Industry Association said the measure would "bring balance to our legal process." Representatives of several business and industry groups, including NJBIA and the New Jersey Chamber of Commerce, urged the committee to advance the bill.

Opponents said the bill, as written, would effectively shut down third‑party litigation funding in New Jersey and impede access to counsel for injured plaintiffs. Ellen Relkin, co‑chair of the Mass Tort Section at the New Jersey Association for Justice, argued that "the net effect of this bill would be to stop all litigation funding in New Jersey, depriving injured parties of their opportunity to find counsel to bring cases." Relkin also warned the disclosure and discovery provisions could "pierce the attorney client privilege" and said federal courts and state rule committees have rejected broad discovery on funding as unnecessary.

Committee discussion noted the bill had been amended in committee to add definitions, to require a motion before courts impose sanctions for nondisclosure, and to cap combined payments to funders and attorneys at 50% absent a party’s expressed consent. Senator McKeon, the bill’s sponsor, and other members described the legislation as a work in progress, saying they expected continued negotiations on scope and court interaction. Relkin and other opponents urged the committee to consider the District of New Jersey local rule (listed in testimony as rule 7.101) and federal case law as models for narrower disclosure.

On the motion to amend and release S4374, Senator Bramnick recorded an abstention; Senators Singer, Johnson, Vice Chair Kryon and Chairman Lagana voted to release the bill as amended. The committee recorded the release with the understanding that sponsors and interested parties will continue discussions and potential technical changes.

The committee did not adopt any additional limitations on discovery beyond those in the committee amendment and directed sponsors to consult further with stakeholders. The bill will proceed to the Senate floor with the committee amendment in place and with continuing negotiations expected.