Major Update in Ohio Litigation: House Bill 105 Creates New Rules for Litigation Funding and Disclosure

The Ohio General Assembly recently enacted House Bill 105 (“H.B. 105”) on July 7, 2026, significantly expanding Ohio’s regulation of litigation funding. The legislation repeals Ohio’s previous law governing nonrecourse litigation funding agreements and replaces it with a comprehensive statutory framework governing both consumer legal funding agreements (cash advances provided to individuals with pending lawsuits) and commercial litigation financing agreements (funding provided to businesses, law firms, or claimants pursuing civil litigation).

H.B. 105 establishes new registration requirements for litigation funding companies; enhances consumer protection; increases transparency with disclosure requirements; limits the role litigation funders may play in pending cases; restricts foreign involvement in litigation funding; and strengthens the Ohio Attorney General’s enforcement authority. H.B. 105 provides greater oversight of an industry that has grown substantially.

Among the most significant changes, H.B. 105 requires both consumer legal funding companies and commercial litigation financiers to register with the Ohio Attorney General before conducting business in Ohio. Registration requires companies to provide identifying business information, disclose company leadership, and certify compliance with Ohio laws.

The bill also creates several new requirements for consumer legal funding agreements. Among other things, agreements must be fully completed before they are signed; clearly disclose the amount being advanced and all fees; state the maximum amount the funding company may recover; provide consumers with a cancellation period without penalty; advise consumers to seek legal and financial advice before entering the agreement; and include a written acknowledgment from the consumer’s attorney confirming the agreement has been reviewed and explained. These provisions are intended to ensure consumers fully understand the financial obligations associated with litigation funding before accepting an advance.

H.B. 105 also limits the conduct of litigation funding companies. The bill prohibits funding companies from paying or accepting referral fees involving attorneys or healthcare providers; making false or misleading advertisements; referring consumers to specific attorneys or medical providers, except in limited circumstances; influencing litigation strategy, settlement decisions, attorney selection, or expert witness decisions; charging prepayment penalties; or charging a one-time service fee greater than seven percent of the initial funded amount. These provisions are designed to ensure that litigation funders remain financial participants and do not influence how lawsuits are prosecuted or resolved.

In addition, H.B. 105 addresses potential conflicts of interest involving attorneys and litigation funding companies. Attorneys with a financial interest in a litigation funding company, or whose family members have such an interest, generally may not represent consumers whose claims are funded by that company or directly provide litigation funding to their own clients.

One of H.B. 105’s most notable provisions concern transparency. After a funded case is resolved, attorneys must disclose the existence and contents of both consumer and commercial litigation funding agreements to the Ohio Attorney General within fourteen (14) days. The Attorney General is required to publish those agreements online after removing confidential and identifying information. Significantly, H.B. 105 provides that any contractual provision attempting to prohibit or limit discovery of litigation funding agreements is void and unenforceable.

H.B. 105 further prohibits consumer and commercial litigation funding agreements involving persons or entities not domiciled in the United States, whether directly or indirectly. According to the General Assembly, these restrictions are intended to protect the integrity of Ohio’s judicial system by limiting foreign influence over litigation in Ohio courts.

Finally, the bill provides the Ohio Attorney General with new enforcement authority. The Ohio Attorney General is authorized to enforce the statute and may seek equitable remedies, including prohibiting companies from conducting litigation funding businesses in Ohio. Certain violations involving consumer funding agreements also constitute unfair or deceptive acts under Ohio’s Consumer Sales Practices Act.

H.B. 105 represents one of Ohio’s most significant updates to litigation funding law. It establishes comprehensive rules governing how litigation funding companies operate and clarifies the role they may play in pending litigation. For insurers, businesses, defense attorneys, and claimants alike, the legislation promotes greater oversight, transparency, and accountability while reinforcing that litigation decisions must remain with the parties and their attorneys, not third-party financial backers.

The bottom line is, H.B. 105 is intended to eliminate funder control over litigation decisions; provide greater protection of privileged communications and client confidentiality; impose restrictions on referral-fee and compensation arrangements with funders; establish compliance and diligence requirements when obtaining or facilitating funding; and limit foreign-backed funding.

For entities regularly engaged in litigation, the new law presents both opportunities and strategic considerations in evaluating claims, assessing settlement dynamics, and investigating the parties and interests driving litigation.

Going forward, there are new opportunities for discovery. Defendants should consider whether litigation funding may be relevant in evaluating settlement posture; assessing a plaintiff’s financial incentives; investigating potential conflicts of interest; analyzing who may ultimately benefit from a recovery; and framing discovery requests where funding arrangements may be relevant to claims or defenses.

As H.B. 105 is implemented, we will continue to monitor new developments and their impact on civil litigation in Ohio.

For additional information, contact Chad M. Sizemore at 513-909-1533 or csizemore@dmclaw.com, Kristin L. Wedell at 216-685-1827 or kwedell@dmclaw.com, or Noah B. Oliver at 614-258-5708 or noliver@dmclaw.com.