Ohio's Litigation Funding Law Takes Effect 6 October With a Foreign-Funder Ban and AG Registration

The Ohio litigation funding law enacted as Substitute House Bill 105 becomes operative on 6 October 2026, thirteen days from today, and it does three things no other state statute does in combination: it bars foreign governments, foreign corporations and foreign investors from financing Ohio claims, it makes both consumer and commercial funders register with the Attorney General, and it forces a commercial financing agreement into the hands of every named party and every potentially defending insurer at the moment the claim is asserted. Governor Mike DeWine signed the bill on 7 July 2026; the ninety-day interval that Ohio gives most legislation runs out at the start of October, which means the compliance work is now, not later.

For a practice area that has spent five years arguing about whether Third-Party Litigation Funding should be disclosed at all, Ohio has skipped the disclosure debate and gone to licensing. The Act enacts a new Chapter 1357 of the Ohio Revised Code — sections 1357.01, 1357.011 and 1357.02 through 1357.10 — and repeals R.C. 1349.55, the narrow nonrecourse-advance provision that had governed the field since 2008. The sponsors were Representatives Meredith Craig and Jim Thomas, who framed the bill on passage as a transparency and accountability measure for an industry that advances money to plaintiffs, law firms and businesses in exchange for a slice of a future recovery.

What Ohio's HB 105 litigation funding law actually does

The statute is best read as two regulatory regimes bolted into a single chapter, joined by a common registration requirement, a common set of conduct prohibitions and a common enforcement mechanism in the Attorney General's office.

The first regime governs consumer legal funding: the nonrecourse cash advance made to an individual claimant against the value of a pending claim, the product that critics compare to payday lending and that plaintiffs' firms encounter when a client cannot pay rent while a case is pending. The Act defines a consumer legal funding agreement by reference to a contingent right to a share of the proceeds, and excludes any transaction in which the cash advanced reaches $400,000 or more. Consumer agreements attract the full battery of retail-credit protections: a written agreement completed in full before signature, itemized disclosure of the amount advanced, the charges, how those charges accrue and the maximum amount the consumer can ever owe, a ten-business-day right to cancel without penalty, a cap on charges, and a prohibition on prepayment penalties.

The second regime governs commercial litigation financing: capital advanced to a business, a law firm or a claimant pursuing civil litigation. There is no fee cap here and no cancellation right, because the borrower is assumed to be sophisticated. What the commercial side attracts instead is the disclosure obligation that will matter most to litigators, discussed below.

Both regimes are subject to the same conduct rules. A funder may not direct or influence the selection of counsel, the conduct of the litigation, or any settlement decision. A funder may not pay or receive referral fees to or from attorneys or other professionals. And an attorney involved in a commercial financing arrangement is barred from sharing with the financier any document or information covered by a protective or sealing order. Those three prohibitions, read together, are the statutory answer to the control problem that has animated bar-association commentary on funding for a decade: Ohio does not ask whether a funder in fact exercised control, it forbids the arrangement that would allow it.

When does Ohio's litigation funding law take effect?

Ohio's litigation funding law takes effect on 6 October 2026, ninety days after the Governor's 7 July 2026 signature, and it applies to conduct from that date forward. The single most common error in the secondary commentary is to treat 6 October as the date on which every obligation in Chapter 1357 becomes enforceable. It is not. The registration obligation for consumer legal funding companies is expressed to begin ninety days after the section takes effect, which places it in early January 2027 — a deliberate runway so that funders operating in Ohio on 6 October are not instantly unlawful.

The practical consequence is a staggered calendar that funders and their counsel should be working from now.

Date	What happens
7 July 2026	Governor DeWine signs Sub. H.B. 105
6 October 2026	Chapter 1357 takes effect; conduct prohibitions, consumer-protection terms and the disclosure provisions become operative; R.C. 1349.55 is repealed
6 October 2026 onward	Commercial litigation financing agreements executed or amended must be produced to named parties and potentially defending insurers when the claim is asserted
Early January 2027 (90 days after the section's effective date)	Consumer legal funding companies must be registered with the Ohio Attorney General before commencing business
Case resolution	Funding agreements reported to the Attorney General; certain categories published to the Attorney General's publicly accessible platform

Nothing in the Act reaches back to reopen an advance that closed before 6 October. The obligations that bite are the ones triggered by conduct after the effective date: executing or amending an agreement, asserting a claim, taking a new consumer's business. A funder with an Ohio book written in 2025 should not assume the book is grandfathered for every purpose, because the in-case disclosure triggers attach to the litigation rather than to the contract, and a claim asserted in November 2026 under a 2025 agreement is a claim asserted after the effective date.

Does Ohio require plaintiffs to disclose a litigation funding agreement during the case?

Yes for commercial financing, and yes on request for consumer funding — and this is where a good deal of the published commentary has gone wrong.

Several write-ups have described the Ohio litigation funding law as a reporting statute that keeps funding arrangements out of the litigation and sends them to the Attorney General only once the case is over. That describes part of the scheme, not the whole of it. R.C. 1357.07(C) requires the claimant, or the claimant's attorney, to provide any commercial litigation financing agreement to all named parties to the legal claim and to all insurers that may have a potential duty to defend or indemnify a named party, at the time the legal claim is asserted or commenced — and at any later time such an agreement is executed or amended — without awaiting a discovery request. That is automatic production, on the defendant's doorstep, before a single interrogatory is served.

The consumer side works differently. A consumer legal funding agreement, and the parties to it, are presumed subject to discovery in any civil proceeding; a party that has entered into such an agreement must disclose its contents and its parties to the other parties without delay; and a consumer must state whether a funding agreement exists within 30 days of a request from a party or from an insurer with a duty to defend. Discovery is the vehicle, but the presumption has been flipped: the requesting party no longer has to establish relevance against a relevance objection.

Reinforcing both tracks is a provision that will outlive the rest of the statute in importance. Any contractual term that purports to prohibit or limit discovery of a litigation funding agreement is void and unenforceable. Confidentiality clauses have been the funding industry's principal shield in discovery fights from the District of Delaware standing order onward; in Ohio they now cannot be written at all.

Funding type	Trigger	To whom	Timing
Commercial litigation financing	Claim asserted or commenced; later execution or amendment	All named parties; insurers with a potential duty to defend or indemnify	Automatic — no discovery request required
Consumer legal funding	Discovery, or a request by a party or defending insurer	Other parties to the claim	Without delay on disclosure; 30 days to answer a request
Either	Resolution of the case	Ohio Attorney General; certain categories published	Post-resolution

Registration, the Attorney General and the enforcement machinery

Chapter 1357 makes the Ohio Attorney General the regulator of an industry that has, until now, been regulated in most states by nothing more than the common law of champerty and the occasional standing order. Consumer legal funding companies and commercial litigation financiers must register before doing business in the state. Funding agreements go to the Attorney General when the underlying matter resolves, and the Act contemplates publication of certain categories of agreement on a publicly accessible platform — a post-hoc transparency register with no analogue in any other state.

Enforcement runs through the Attorney General's existing consumer-protection apparatus. The Attorney General may investigate, may seek declaratory or injunctive relief or other equitable remedies, and may bring an action against a funder found to have violated the chapter. Among the remedies available is an order barring a consumer legal funding company or a commercial litigation financier from doing business in Ohio — a market-exit penalty that no money judgment matches in deterrent terms. Ohio's Consumer Sales Practices Act supplies the penalty scale, with civil penalties of up to $25,000 for each violation and up to $5,000 for each day of violation of a restraining order or injunction.

For a funder, the compliance risk is therefore asymmetric. The downside of an unregistered advance is not a fee disallowance; it is potential exclusion from the state.

Does Ohio HB 105 ban foreign litigation funding?

Yes. The Act contains what its sponsors and the US Chamber's Institute for Legal Reform have both described as the first state prohibition in the country covering all foreign governments, foreign corporations and foreign investors participating in third-party litigation funding. The reach is not limited to sanctioned states or to sovereign wealth vehicles; it is a categorical bar on funding agreements with persons and entities domiciled outside the United States.

That provision is the one most likely to be tested. Modern litigation finance is structured through multi-jurisdictional fund vehicles, and the question of where a limited partner or an offshore feeder is "domiciled" is not always answerable from the face of a funding agreement. A funder with a Cayman master fund and US-domiciled feeders will need an opinion on whether the Ohio prohibition looks through to capital sources or stops at the contracting counterparty. Mississippi took a lighter approach in Senate Bill 2747, signed on 8 April 2026 and effective 1 July 2026, which requires disclosure to the Attorney General within 30 days of the citizenship or country of incorporation of any "foreign entity of concern" behind a payout rather than prohibiting the arrangement. Ohio has chosen prohibition over disclosure, and the drafting will have to carry the weight.

What it means for mass tort and mass arbitration portfolios

Most commentary on the Ohio litigation funding law has been written for the single-plaintiff auto case. The provisions that matter at scale are elsewhere.

Portfolio financing of Ohio filings. A plaintiffs' firm financing a Mass Tort inventory across several states now has to assume that the portion of its facility touching Ohio-filed claims is a commercial litigation financing agreement that will be handed to the defence at filing. Where a facility is cross-collateralized across dockets, counsel will have to consider whether the whole instrument, or a case-specific schedule, is the "agreement" that R.C. 1357.07(C) requires to be produced. That is a drafting question to be solved before 6 October, not litigated afterwards.

Claim acquisition. The referral-fee prohibition cuts across the marketing economics of mass tort origination. Arrangements in which a funder advances the cost of claimant acquisition and is compensated by reference to signed retainers will need to be tested against a statute that forbids a funder paying referral fees to attorneys or other professionals.

Common benefit and settlement administration. Where Ohio state-court filings run parallel to a federal Multidistrict Litigation (MDL), leadership will be managing a Common Benefit Fund and a settlement structure in which some claimants are subject to Ohio's disclosure regime and others are not. Lien resolution is affected too: a consumer advance and a Medical Lien now sit under different statutory regimes in the same client file, with different disclosure consequences.

Mass Arbitration. The Act is written around a "legal claim" and a "civil proceeding" rather than a court docket, so counsel financing a large batch of arbitration demands against an Ohio-resident claimant population should not assume the chapter stops at the courthouse door. The prudent reading is that a funder's conduct prohibitions — no control of strategy, no control of settlement, no referral fees — apply to funded arbitration programs on their terms, whatever view one takes of the disclosure triggers.

None of this changes the arithmetic of the Contingency Fee itself. What changes is that the capital behind the fee becomes visible to the other side, in Ohio, on day one.

Ohio in the 2026 state patchwork — and the federal rule behind it

2026 has been the year state legislatures stopped studying litigation finance and started writing statutes. Ohio is the most detailed of them, but it is not the most severe.

Jurisdiction	Instrument	Signed	Effective	Core mechanism
North Carolina	H.B. 315 / S.L. 2026-14	22 June 2026	22 June 2026	Outright ban on litigation investment; civil penalties up to $50,000 per violation, enforced by the Attorney General
Ohio	Sub. H.B. 105	7 July 2026	6 October 2026	Registration, automatic commercial disclosure, foreign-funder ban, consumer fee caps
Mississippi	S.B. 2747	8 April 2026	1 July 2026	Registration and disclosure; foreign-entity-of-concern reporting to the Attorney General within 30 days
California	A.B. 2305 (Ch. 393)	20 September 2026	Contracts entered on or after 1 January 2027	Funder interference with a substantive litigation decision treated as the unauthorized practice of law; $10,000 per violation or treble damages
Illinois	Consumer Legal Funding Act	—	In force	Registration with the Department of Financial and Professional Regulation; surety bond

The federal track is moving on a much slower clock. A rules suggestion filed on 14 September 2026 by 214 companies asks the Advisory Committee on Civil Rules to write a uniform Rule 26 disclosure requirement; the Committee's Third-Party Litigation Funding Subcommittee, created in October 2024 and chaired by Chief Judge R. David Proctor, takes the question up at the Committee's meeting on 21 October 2026. Even on an unobstructed path, a rule published for comment in 2027 does not bind a federal litigant until the end of the decade. Ohio's obligations bind in thirteen days. For the next several years, the operative law of funding disclosure in the United States will be state law, and it will not be uniform.

Ohio's approach is also worth setting against California's. A.B. 2305, signed three days ago, regulates the relationship — it makes a funder's interference with a substantive litigation decision the unauthorized practice of law and voids contract terms permitting it. Ohio regulates the transaction — it licenses the funder, caps the retail product, and publishes the paperwork. A national funder will have to satisfy both, and they are not drafted to fit together.

What it means for funders, plaintiffs' firms, defendants and insurers

For funders. Two dates, not one: conduct rules on 6 October 2026, consumer registration roughly ninety days later. Between now and 6 October, the work is contractual — remove any confidentiality term that limits discovery of the agreement, since it is void in Ohio and its presence signals a compliance failure; segregate Ohio exposure within multi-state facilities so that a producible agreement can be produced without exposing an entire portfolio; and obtain a defensible position on the domicile of every capital source behind Ohio deals.

For plaintiffs' firms. The disclosure obligation in R.C. 1357.07(C) falls on the claimant or the claimant's attorney. Case-opening checklists for Ohio matters need a funding question, and the answer needs to be produced with the complaint rather than negotiated in discovery. Firms carrying portfolio facilities should expect defence counsel to read the produced instrument for anything that looks like control, and should assume that a funding agreement drafted before this statute was written was not drafted to be read by an adversary.

For defendants and their counsel. The information arrives without a motion. What to do with it is the harder question: the statute grants production, not admissibility, and it does not make the existence of funding relevant to any issue a jury will decide. The realistic uses are the ones defence practitioners have always wanted — conflicts screening, identifying the economic decision-maker on the other side, and calibrating settlement posture against a funder's return threshold rather than against the named plaintiff's needs.

For insurers. Carriers with a potential duty to defend or indemnify are named recipients under R.C. 1357.07(C). That is a statutory information right that does not depend on the insured asking for it, and claims organizations handling Ohio exposure should build intake for it before October. It also cuts the other way: a Qualified Settlement Fund (QSF) structure or a resolution program covering Ohio claimants will now be negotiated in an environment where both sides know who is funding whom.

Frequently asked questions

What does Ohio's HB 105 litigation funding law do?

It enacts Ohio Revised Code Chapter 1357, repeals R.C. 1349.55, requires consumer legal funding companies and commercial litigation financiers to register with the Ohio Attorney General, bans foreign governments, corporations and investors from funding Ohio claims, prohibits funders from controlling counsel selection, strategy or settlement, caps consumer funding charges, and requires funding agreements to be disclosed to opposing parties and, on resolution, to the Attorney General.

When does the Ohio litigation funding law take effect?

6 October 2026, ninety days after Governor Mike DeWine signed Sub. H.B. 105 on 7 July 2026. The separate registration obligation for consumer legal funding companies begins ninety days after that section takes effect, in early January 2027.

Do litigation funders have to register with the Ohio Attorney General?

Yes. Both consumer legal funding companies and commercial litigation financiers must register with the Attorney General before doing business in Ohio. The Attorney General may seek an order barring an offending funder from doing business in the state, in addition to Consumer Sales Practices Act penalties of up to $25,000 per violation and up to $5,000 per day for violating an injunction.

Does Ohio require disclosure of a litigation funding agreement during the case?

For commercial litigation financing, yes and automatically: R.C. 1357.07(C) requires the agreement to be given to all named parties and to insurers with a potential duty to defend or indemnify when the claim is asserted, without a discovery request. For consumer legal funding, the agreement is presumed discoverable and the consumer must answer a request within 30 days. Any contract term limiting discovery of a funding agreement is void.

Does Ohio HB 105 ban foreign litigation funding?

Yes — it prohibits foreign governments, foreign corporations and foreign investors from participating in third-party litigation funding of Ohio claims. Sponsors and the Institute for Legal Reform describe it as the first such state prohibition in the country; Mississippi, by contrast, requires disclosure of foreign entities of concern rather than prohibiting the arrangement.

Does HB 105 apply to funding agreements signed before 6 October 2026?

The chapter operates prospectively, and an advance that closed and resolved before the effective date is not reopened. But the in-case disclosure triggers attach to the litigation rather than to the contract, so a claim asserted after 6 October under an earlier agreement, or an earlier agreement amended after that date, falls within the disclosure provisions. Funders should not treat a pre-October book as fully grandfathered.

Who opposed the bill?

The Ohio Association for Justice and the International Legal Finance Association both testified in opposition during the bill's House hearings in March 2025, and commentators across the spectrum — including conservative legal groups that rely on outside financing for impact litigation — argued that broad recurring disclosure would fall hardest on smaller funded litigants rather than on well-capitalized institutional ones.