A bill no governor in the country has ever signed sits on Josh Stein's desk. It does not regulate third-party litigation funding. It bans it. One pen stroke makes North Carolina the first state to abolish the model entirely.
Governor Josh Stein has a bill on his desk that no governor in the country has ever signed. It landed there June 12. As of this writing, six days later, he has not touched it. The pen is the only thing standing between North Carolina and the first outright ban on third-party litigation funding in the United States.
Most states that have moved on funding moved on disclosure. Tell the court who is bankrolling the plaintiff. Cap the funder's cut. Force a plain-language contract. North Carolina's House Bill 315 does none of those half-measures. It bars the arrangement itself. No person or entity may fund a claimant or a defendant in exchange for a contingent stake in the outcome of a case. The funding model that built a multibillion-dollar global industry would simply become illegal inside the state line.
The vote was not close. The North Carolina House passed the measure 112 to 0 in March 2025. The Senate sent it back on June 9, 2026, by a margin of 45 to 1. One senator out of forty-six dissented. The bill was ratified June 11 and presented to the Governor the next morning under the legislature's own short title, "Prohibit Litigation Invest/Amend WC Benefits." A near-unanimous, bipartisan wall behind a law that would erase an entire financing class is the kind of vote count that does not happen by accident.
The carve-outs tell you who the legislature was aiming at. Nonprofits are spared. Legal-aid groups are spared. Insurers defending their own policyholders are spared. A family member who fronts a relative's case is spared. What is left in the crosshairs is the commercial funder, the institution that writes an eight-figure check against a docket and waits for the verdict. The narrowness of the exceptions is the point. This is not a transparency rule dressed up as reform. It is a kill shot at a business model.
That puts a name in the line of fire. Burford Capital, the largest publicly traded litigation funder in the world, surfaced in Bloomberg Law's coverage as one of the firms assessing its North Carolina exposure and the enforceability of the ban. Litigation Capital Management was named alongside it. For a funder, a single-state ban is more than lost deal flow. It is a precedent risk. North Carolina passed this 45 to 1. If a signature turns that tally into law, every other state legislature gets a template and a proof of concept, and the industry's entire regulatory argument shifts from "how should funding be disclosed" to "should funding exist at all."
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The contrast with the rest of the map sharpens the drama. The same fortnight North Carolina moved to ban, New York's Consumer Litigation Funding Act took effect on June 17, capping a funder's take at 25 percent of a plaintiff's gross recovery and demanding plain-language contracts. The largest state in the funding market chose to regulate and cap. North Carolina chose to abolish. Two states, two weeks, two opposite theories of how to handle the same industry. At the federal level, a Grassley-led transparency bill introduced in February would force disclosure in large class actions and multidistrict litigation, but even that reaches only for sunlight, not for the throat.
Two states, two weeks, two opposite theories of how to handle the same industry. New York chose to cap. North Carolina chose to abolish.
For litigators, the strategic stakes turn on what happens to the cases already funded. A plaintiff whose contingency lawyer is leaning on a funder's capital to outlast a deep-pocketed defendant loses that staying power if the arrangement becomes unenforceable inside the state. Defense counsel who have spent years arguing that funding fuels meritless, over-leveraged litigation get the most direct vindication imaginable, not a disclosure obligation but the removal of the fuel. Whether existing contracts survive, whether they get unwound, whether funders can restructure around the carve-outs, all of it rides on language Stein has not yet signed.
Which is exactly where the suspense sits. Stein is a Democrat, a former attorney general, and the trial bar that lives on funded cases is not a constituency a Democratic governor crosses lightly. A 45-to-1 Senate vote is veto-proof on its face, which narrows his real options to signing, letting it become law without his signature, or staging a veto fight he would likely lose. He has done none of those things yet. Every day the bill sits unsigned, the funding industry holds its breath and the rest of the country watches to see whether the first domino actually falls.
One signature. It has not happened. It is about to.
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