The bill creates a new chapter in Title 19 RCW establishing a regulatory regime for third‑party litigation financing. It defines covered transactions and parties, sets disclosure and production requirements for claimants and attorneys (including written certification of funder identity and production of an unredacted financing agreement), requires disclosures to be made upon filing or within 35 days if executed after filing and corrected within 35 days if incomplete, and makes noncompliant litigation financing agreements void. The chapter also makes the existence and terms of an agreement subject to discovery and requires disclosure statements to be made under penalty of perjury based on actual knowledge after reasonable inquiry, with recipients required to preserve confidentiality. The bill imposes substantive prohibitions and limits on third‑party funders and related service providers: funders may not direct or influence an attorney’s conduct or settlements; may not be assigned profit rights beyond a contingent share of proceeds or agreed fees/interest; may not share proprietary or national security information with nonparties; may not accept or pay commissions/referral fees with persons providing goods or services to a claimant; may not securitize assignments; may not report parties to credit reporting agencies; may not offer legal advice; must deliver fully signed agreements promptly; may not charge interest above RCW 19.52.020; and may not recover more than 25% of the monetary relief from the funded action. The bill bars funders who are directly or indirectly financed by specified foreign countries or entities of concern. The act makes violations matters vitally affecting the public interest under the consumer protection act, allows remedies including statutory damages of $10,000 per violation, disgorgement of funds paid or received under the agreement, and other equitable relief, and includes severability. The act takes effect July 1, 2026 and applies prospectively only to agreements entered on or after that date. The provided material omits the new chapter number, some portions of Section 4 and earlier prohibited items (a)–(f), and some definitions and provisions that likely appear elsewhere in the bill, so the summary is limited to the provisions shown.

If enacted, this law would sharply limit how third‑party litigation funders can operate in Washington starting July 1, 2026: funders would have to disclose their identity and provide unredacted agreements to all parties early in a case, could not steer attorneys or litigation strategy, could not take more than 25% of a recovery or charge interest above RCW 19.52.020, and would be barred from referral fees, securitization of agreements, reporting plaintiffs to credit bureaus, or taking funding from listed foreign “countries or entities of concern.” That will likely reduce some funding options and returns for funders, increase their compliance and disclosure costs, and raise the risk that noncompliant contracts are voided and subject to statutory damages, disgorgement, and consumer‑protection suits. Claimants and their lawyers will gain more transparency and protection from hidden control or excessive paybacks, but lawyers will have new disclosure duties and vendors who relied on referral payments will lose that revenue stream. Some important details are missing from the extracted text, so the practical scope is partly uncertain: several earlier prohibition items and portions of the funder conduct rules are not included here, and a complete set of definitions and any additional enforcement or oversight provisions in other sections may alter who is covered or how rules are applied.