Smith Anderson's Chris Smith Helps Drive Nation's First Ban on Third-Party Litigation Investment

Smith Anderson partner Chris Smith was featured by Law360 and the NC Chamber following North Carolina’s enactment of House Bill 315, a landmark law making North Carolina the first state in the nation to prohibit third-party litigation investments in civil lawsuits. Chris, who serves on the board of the NC Chamber Legal Institute, the Chamber’s legal advocacy arm focused on strengthening North Carolina’s business and civil justice climate, played a key role in advocating for the legislation because of its significance to the state’s business community and court system.

Third-party litigation investment allows outsiders to invest in a lawsuit and take an equity interest in any settlement or judgment. The practice has drawn increasing scrutiny from business and legal organizations across the country over concerns that outside investors may influence litigation strategy, prolong disputes, increase litigation costs, and undermine confidence in the courts. Through his leadership at the NC Chamber Legal Institute, Chris worked closely with business leaders and policymakers to educate stakeholders on the legislation’s importance to North Carolina's legal and economic competitiveness. As Law360 noted, while other states have pursued measures focused on disclosure or regulation, North Carolina became the first to prohibit third-party litigation funding altogether.

“Third-party litigation investment turns our courtrooms into financial investment markets, creating uncertainty and distortions within the civil justice system. This landmark law will ensure North Carolina’s courts remain focused on the fair administration of justice,” Chris said in the NC Chamber’s announcement.

"Chris has been a valued advisor to the NC Chamber Legal Institute since its founding and has played an important role in advancing our work to strengthen North Carolina's legal climate,” said Gary J. Salamido, president and CEO of the NC Chamber. “His thoughtful leadership, legal expertise, and commitment to protecting our state's competitiveness helped make this first-in-the-nation legislation possible. We are grateful for his partnership and proud to celebrate our state’s big win.”

The new law was championed by the NC Chamber and supported by the U.S. Chamber Institute for Legal Reform as an important step in protecting the integrity of North Carolina’s courts and civil justice system. The recognition highlights Chris's leadership in helping shape legislation that has attracted national attention and further reinforces Smith Anderson's role in matters affecting North Carolina's legal and business climate.

Read the full coverage in Law360 and the NC Chamber’s announcement to learn more about the legislation.