Kansas litigation funding regulations require counsel to review more than repayment terms when a client uses third-party litigation funding in Kansas. The agreement can trigger court reporting, in camera review, and a sworn statement process with deadlines that should be tracked alongside the case schedule.

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Chapter 60 of the 2025 Kansas session laws amended K.S.A. 60-226 to address disclosure and reporting of third-party litigation funding agreements. The statute also sets a timing rule tied to the later of 30 days after the action begins or 30 days after the agreement is executed. This guide separates those enacted requirements from practical review steps and provider-specific terms.

With that framework in place, the first review question is what Kansas treats as a third-party funding agreement and what the disclosure review requires.

What Kansas Litigation Funding Regulations Require in a Disclosure Review

Kansas enacted Substitute for Senate Bill 54 as Chapter 60 of the 2025 session laws. The measure amends K.S.A. 2024 Supp. 60-226 and addresses disclosure and court reporting for third-party litigation funding agreements. The Kansas Legislature records the bill as signed by the governor. Attorneys should review the enacted text, rather than relying on summaries or assumptions about other states’ rules. Read Chapter 60 of the Kansas session laws.

Provide the agreement for in camera court review

Under the amended statute, a party that has entered into a third-party litigation funding agreement must provide the agreement to the court for in camera review. In camera review means the court examines the document privately. The statute also requires a sworn statement to be delivered to the other parties, unless the parties stipulate otherwise or the court orders otherwise.

Track the later of two 30-day deadlines

The agreement must be provided to the court within 30 days after commencement of the legal action. It must also be provided within 30 days after execution of the funding agreement, whichever is later. The sworn statement follows the same later-of-30-days timing. That means counsel should identify both dates, document which date controls, and avoid treating execution before filing as a reason to ignore the deadline.

Separate the statute from prudent review

These are enacted disclosure and court-review requirements. They do not, by themselves, establish a general interest-rate cap or prove that every funding arrangement is licensed under a particular Kansas regime. A prudent review goes further by confirming that the agreement falls within the statutory definition, checking the required statement details, and examining provisions concerning control, settlement decisions, confidentiality, conflicts, repayment, and the source of funds. Those review steps help counsel protect the client’s informed choice, but they should not be presented as additional statutory requirements unless current Kansas authority supports them.

This article provides general educational information, not legal advice. Counsel should consult the current statute and assess how the rule applies to the facts and procedural posture of a particular case.

What Counts as a Third-Party Litigation Funding Agreement?

Under Kansas litigation funding regulations, a covered third-party litigation funding agreement generally involves two connected features. A nonparty agrees to pay expenses directly related to pursuing a legal claim, and that nonparty has a contractual right to compensation that depends, at least in part, on the outcome of the claim. The statutory definition excludes a party to the case, the attorney representing that party, the attorney’s firm, and a member of the party’s family or household. See Chapter 60 of the 2025 Kansas session laws.

That scope matters because the agreement’s classification can affect the review and reporting steps that follow. Counsel should identify who is providing the funds, what litigation-related expenses are being paid, and how the provider’s compensation is calculated. Read the actual contract rather than relying on labels such as “advance,” “investment,” or “loan.” The economic structure and outcome contingency are more important than the marketing name.

This definition should not be used to infer a general Kansas interest-rate cap. The applicable law and the agreement’s terms require separate review, and a summary of legislative language should not be treated as a blanket rate rule. Attorneys should also distinguish a covered funding agreement from ordinary assistance that falls outside the statutory definition, while recognizing that the facts and contract language may matter.

Discovery is a related but separate question. Kansas discovery generally reaches nonprivileged information that is relevant to a claim or defense and proportional to the needs of the case. Courts may limit requests that are unreasonably cumulative or duplicative, or when the requesting party has already had an ample opportunity to obtain the information. Review the current Kansas discovery statute and any case-specific order before assuming what must be produced. This section is general educational information, not legal advice.

What Information Should the Sworn Statement Address?

When a Kansas case involves a third-party litigation funding agreement, the sworn statement should give the other parties a clear, limited picture of the arrangement. Chapter 60 of the 2025 Kansas session laws identifies the information that must be addressed. Counsel should compare the statement against the executed agreement and confirm that each required point is answered accurately.

• Who are the contracting parties? Identify every party to the agreement. For a legal entity, include its name, address, and place of formation.
• Does the funder have control or approval rights? State whether the funder can control or approve litigation or settlement decisions. If so, describe the nature of those rights and their terms and conditions.
• Could the arrangement create a conflict? Address whether the funding relationship has the potential to create a conflict of interest between the funder and the party. This calls for a careful review of who may benefit from particular litigation or settlement decisions.
• Can the funder receive confidential materials? Identify whether the agreement gives the funder a right to receive materials designated confidential under a protective or confidentiality agreement or order in the action.
• Are there known relationships? Disclose any known relationship between the funder and the adverse party, the adverse party’s counsel, or the court.
• What is the funder’s financial interest? Describe the nature of that interest, including whether it is recourse or non-recourse.
• Is foreign funding involved? State whether a foreign person from a foreign country of concern is providing funding directly or indirectly. Include the identifying details required by the statute when that provision applies.

These points are not a substitute for reviewing the full agreement. They help counsel identify decision-making rights, confidentiality implications, relationships, repayment exposure, and the source of funding before making the required disclosure. The official Kansas Chapter 60 session law is the controlling source for the statutory wording. This discussion is general educational information, not legal advice. Attorneys should confirm the current law, applicable orders, and case-specific obligations before preparing or serving a sworn statement.

How Should Attorneys Review Confidentiality, Conflicts, and Control?

A funding review should begin with the client’s informed choice and the agreement’s effect on professional judgment. Kansas disclosure rules specifically require attention to whether a funder receives control or approval rights over litigation or settlement decisions, and whether the arrangement could create a conflict of interest. If those rights exist, the disclosure must describe their terms and conditions. The client, not the funder, should remain the decision-maker about litigation objectives and settlement.

Confidentiality deserves a separate, document-level review. Kansas law calls for disclosure of whether the funder may receive materials designated confidential under a protective or confidentiality agreement or order. That requirement does not answer every privilege or protective-order question. Counsel should identify what information would be shared, confirm that the proposed sharing is permitted, and consider whether the court’s protective order needs clarification or modification before transmission.

The sworn disclosure also addresses known relationships between the funder and the adverse party, adverse counsel, or the court. Attorneys should investigate those relationships rather than treating the disclosure as a formality. Ask who negotiated the agreement, who can access case materials, who benefits financially, and whether any approval mechanism could affect advice about discovery, offers, or trial strategy. These questions help separate a client’s need for financial support from a funder’s commercial interests.

Disclosure does not automatically turn agreement information into trial evidence. The Kansas legislative summary states that information concerning an agreement is not admissible at trial solely because it was disclosed. At the same time, ordinary discovery limits still matter. Kansas discovery generally concerns nonprivileged information relevant to a claim or defense and proportional to the case’s needs. Courts may limit requests that are cumulative, duplicative, or obtainable through other opportunities in the action.

For a broader framework, review these litigation funding disclosure rules. This article is general educational information, not legal advice. Counsel should apply the current statute, the case’s protective orders, and the client’s circumstances before recommending or accepting any arrangement.

How Do Kansas Rules Affect Nonprofit and Non-Recourse Funding?

Kansas law makes an important distinction for nonprofit organizations. The disclosure provision in K.S.A. 60-226 states that it does not require a nonprofit corporation or association to disclose its members or donors. That exception concerns the identity of members and donors. It does not mean that every funding arrangement involving a nonprofit is outside the statute, or that other required agreement information can be ignored. Counsel should review the current law and the specific transaction separately.

The Milestone Foundation is the United States’ first and only 501(c)(3) nonprofit consumer litigation funding organization. That nonprofit status describes the Foundation’s organizational model, not a blanket exemption from Kansas litigation funding regulations. The Kansas rule and the Foundation’s policies should therefore remain distinct in an attorney’s analysis. For a broader overview of disclosure considerations, see these litigation funding disclosure rules.

Review the agreement, not just the funder’s label

A nonprofit or non-recourse label does not replace careful term review. The Foundation describes its funding as non-recourse, meaning the plaintiff owes nothing if the case loses, subject to the written agreement. Its stated practices also include attorney participation in the application process, plain-language terms, no hidden fees, and no pressure to borrow or accept a settlement. These are Foundation terms and values, not Kansas statutory requirements.

For pre-settlement advances, the Foundation describes 15% simple annual interest, with interest that never compounds. Post-settlement advances are described as 10% simple interest. Attorneys should explain the applicable terms before signing, confirm that the client understands repayment, and preserve the client’s independent settlement decision. Review the Foundation’s ethical litigation funding guidance alongside the agreement and current Kansas authority.

This section is general educational information, not legal advice. Kansas requirements can depend on the agreement, timing, parties, and court orders. Counsel should verify the current statute and apply professional judgment to the client’s circumstances.

How Should Attorneys Explain Repayment Terms to Clients?

Repayment terms should be discussed before a client signs, using examples the client can understand and questions that surface the practical effect of the agreement. Counsel should distinguish simple interest from compound interest, explain when repayment is due, and confirm that the client understands the arrangement without feeling pressured to borrow or settle.

Simple interest is calculated on the original amount advanced. It does not get added to the balance and then used to calculate additional interest. Compound interest, by contrast, can cause the balance to grow because accrued interest is added to the principal. The Milestone Foundation states that its interest never compounds. Its published terms are company terms, not Kansas statutory rates: pre-settlement advances use 15% simple annual interest, while post-settlement advances use 10% simple interest.

Attorney participation remains important. The Foundation requires attorney acknowledgment for its pre-settlement process and verifies case details with counsel. Review the agreement with the client in plain language, identify any fees or repayment conditions, and confirm that there are no hidden fees. The client should have an opportunity to ask questions and make an independent decision. These are The Milestone Foundation’s stated practices and should not be treated as a summary of every requirement under Kansas law.

For broader context, attorneys can also review this ethical litigation funding guidance. This article provides general information, not legal advice. Counsel should evaluate the current agreement and applicable authority for each case.

Kansas Litigation Funding Regulations: Attorney Review Checklist

Use this checklist before a client signs and again when preparing any required disclosure. Kansas law can change, so confirm the current text of K.S.A. 60-226 and applicable court orders, rather than relying on an older form or summary. The litigation funding disclosure rules overview can provide broader context, but Kansas-specific authority controls.

1. Verify the current authority. Review the enacted Kansas provision and any relevant local order or stipulation. The statute requires the agreement to be provided to the court for in camera review, so confirm the court’s procedure and filing expectations.
2. Identify the later-of-30-days timing. Calendar the deadline for the court submission and sworn statement. Under the enacted rule, the timing is the later of two dates. One is 30 days after commencement of the legal action, and the other is 30 days after execution of the funding agreement, subject to the statute’s exceptions and any court direction.
3. Review every sworn-statement item. Confirm that it addresses each contracting party and entity formation details, control or approval rights, and potential conflicts. Also check access to confidential materials, known relationships with the adverse side or court, the funder’s financial interest and recourse status, and any covered foreign funding.
4. Protect confidential material. Determine whether the funder may receive information covered by a protective or confidentiality order. Separate required disclosure from unnecessary production, and consider proportionality and available protective measures.
5. Check control and conflicts. Ask whether the funder can influence litigation strategy, settlement, or approval decisions. Discuss any relationship with the opposing party, opposing counsel, or court, and keep the client’s independent judgment central.
6. Explain repayment in plain language. Walk through the principal, interest, timing, fees, and consequences of different outcomes. If the agreement is non-recourse, explain exactly what that means under the written contract. Do not assume that a provider’s terms are Kansas statutory requirements.
7. Document the client’s decision. Record that the client received an understandable explanation, had an opportunity to ask questions, and chose independently after considering alternatives. Attorney acknowledgment may be required by a provider’s process, but it does not replace client choice.
8. Avoid pressure. Do not encourage borrowing or settlement simply to satisfy a funder. Revisit whether the proposed funding serves the client’s needs and interests before completing the process.

General information only: This checklist is not legal advice and does not replace review of current Kansas law, court rules, orders, or the specific agreement. Counsel should apply independent professional judgment to each matter.

Contact The Milestone Foundation about ethical funding options

Frequently Asked Questions

What does Kansas law require when a plaintiff has litigation funding?

Chapter 60 of the 2025 Kansas session laws requires the party to provide a covered third-party litigation funding agreement to the court for in camera review. The deadline is the later of 30 days after the action begins or 30 days after the agreement is executed. A sworn statement to the other parties may also be required unless the parties stipulate otherwise or the court orders otherwise. See the official Kansas session law.

Are litigation funding agreements automatically privileged in Kansas?

Do not assume a blanket privilege result. Kansas law addresses disclosure and discovery, and the legislative summary states that agreement information is not admissible at trial solely because it was disclosed. Counsel should separately assess confidentiality, protective orders, relevance, proportionality, and any applicable privilege based on the facts of the case.

What should an attorney review before a client signs a funding agreement?

Review who the contracting parties are, the funder’s financial interest, and repayment and non-recourse terms. Also review control or approval rights over litigation or settlement, access to confidential materials, possible conflicts, and known relationships with the opposing side or court. Explain the terms in plain language and document the client’s independent decision.

How can a plaintiff obtain litigation funding responsibly?

The plaintiff should discuss the need and alternatives with counsel, compare the written repayment terms, and understand whether interest is simple or compounds. For The Milestone Foundation, pre-settlement funding is described as 15% simple annual interest and post-settlement funding as 10% simple interest, with no compounding. These are the Foundation’s terms, not Kansas statutory rates, and attorney participation is required for a pre-settlement application.

Contact us about ethical funding options

A clear conversation can help attorneys and clients review funding terms carefully and help the client make an informed decision. If you would like to discuss an ethical funding option for a client, contact The Milestone Foundation.

Contact The Milestone Foundation.