House Bill 315 adds new Article 52 to Chapter 66 of the North Carolina General Statutes, and the scope is total: no person may engage in litigation investment, defined as any outcome-contingent money provision, in any civil action, arbitration, mediation, or administrative proceeding filed in the state. North Carolina is the first to go this far. Every state that’s addressed third-party litigation financing before now landed on disclosure requirements or operational guardrails.
Governor Josh Stein signed the act on June 22, 2026, immediately effective, with teeth: contracts in violation are void, the attorney general can seek injunctions plus up to $50,000 per violation, and private plaintiffs recover three times the contemplated investment amount plus attorneys’ fees.
The statute carves out contingency-fee arrangements, law firm cost advances, insurance defense, qualifying nonprofits, and non-outcome-contingent loans. It doesn’t reach family financial support or funding where the provider receives no contingent right. Out-of-state class actions with absent NC residents probably won’t trigger the ban unless the funding agreement itself has a North Carolina nexus: negotiated, executed, or performed here.
The constitutional question is open. I read the jurisdictional hook in Session Law 2026-14 carefully: it asserts that anyone engaged in litigation investment has “purposefully availed” themselves of conducting business in North Carolina. If courts uphold it, every state legislature drafting TPLF bills in 2026 has a ready template. If they don’t, funders will know the exact seam to exploit.
Worth auditing any active funding agreements with a North Carolina nexus before the next civil filing.
Rebecca Lauren