Litigation Funding Post George vs. Progressive Waste Solutions of La., LLC.

In this article, attorney Daniel Estrada discusses Louisiana law and litigation funding companies post George vs. Progressive Waste Solutions of La., LLC.

What is a Litigation Funding Company?

As a defense practitioner in personal injury, it is likely at some stage of your career you will encounter a litigation funding company. In sum, a litigation funding company is an entity whose purpose is to provide funding to a Plaintiff for medical treatment and surgeries during personal injury litigation. While these companies claim they do not refer any Plaintiff or counsel to any particular physician, the reality is that the physicians who provide these services typically have ongoing agreements with these funding companies and are used regularly by Plaintiff’s counsel.

The litigation funding company makes a profit by purchasing the treating physician’s accounts receivables at a discounted price. The profit is made possible by the physician billing the Plaintiff at a rate that is higher than a physician whose practice does not involve a litigation funding company. Therefore, the profit is the difference between the purchase price and what the physician billed.

Louisiana Treatment of Litigation Funding and Recent Developments

In George v. Progressive Waste Solutions of La. Inc.¹, the Louisiana Supreme Court held that a Plaintiff was entitled to receive the full amount owed to a litigation funding company regardless of the amount actually paid to the Plaintiff’s retained physician. The Court concluded the Defendants had not proven Mr. George had been released from his obligation to pay the full amount billed. In the absence of such evidence, a Defendant cannot subtract the discounted purchase price from a theoretical damage award to the Plaintiff.

However, subsequent jurisprudence can be interpreted as having narrowed the George decision. In Vincent v. Nat’l Gen. Ins. Co.², the Plaintiff appealed to the Fifth Circuit for the failure of the trial court to award the full amount of her medical expenses which were $61,748.50 for her surgeon and $145,900.00 for the surgical facility. The litigation financing company paid both the Plaintiff’s surgeon who performed a cervical fusion and the facility where the surgery was performed a substantially discounted rate in exchange for their rights against the Plaintiff to collect the invoiced amount. In support of her appeal, the Plaintiff contended that the trial court ignored the binding precedent of George v. Progressive Waste Solutions of La. Inc. which determined that a Defendant is not entitled to benefit from any reduction in the sale of medical bills from a medical provider to a litigation funding company.

The Appeals Court distinguished the George decision by noting that the Plaintiff did not introduce any evidence of a contract between herself and her surgeon at trial. In fact, the Court noted that the surgeon testified at his deposition that he had never seen a subrogation or lien contract signed by the Plaintiff. Therefore, the Appeals court found that without a subrogation contract singed by the Plaintiff or a letter of guaranty singed by her counsel there was no record evidence to indicate that the Plaintiff remained personally responsible to her surgeon for the invoiced amount.

Finding no evidence to show the Plaintiff remained responsible for any outstanding charges to her surgeon or the facility where her surgery took place, the trial court calculated a reasonable amount for these services which was what her surgeon accepted as payment from the litigation financing company which was $15,673.25.

Despite George, it appears that a Plaintiff still needs to prove that an agreement exists with his medical providers that he is personally responsible to them for the invoiced amount to be awarded full medical expenses when a litigation funding company is involved.

Other Jurisdictions Have Banned Litigation Funding Companies

At least one state has recognized the need to regulate litigation funding. On June 22, 2026, North Carolina passed a statute banning the use of litigation funding companies. Codified as the Prohibit Litigation Investments Act § 66-511 et. seq. and signed into law by Governor Josh Stein, this statute prohibits the provision of money, whether as a direct payment, advancement, loan, investment, or otherwise, for the fees, costs, and expenses of or related to a pending or potential civil proceeding in exchange for a right to receive repayment or other consideration that is contingent in any respect on the outcome of the pending or potential civil proceeding.

Further, the statute states it is unlawful for a person to engage in litigation investment in this State or to furnish litigation investment to a party or counsel of record in a civil proceeding in this State subject to exceptions such as common contingency fee arrangements. The statute is enforceable via penalties in the form of $50,000.00 for each violation and statutory damages as measured by treble the amount of the full potential litigation investment contemplated by the investor.

Currently, North Carolina is the only state to have prohibited litigation funding by statute. However, California, Colorado and Illinois are considering limitations on outside litigation funding or investing.³ Perhaps Louisiana should look to North Carolina and adopt a similar statute banning litigation funding which only increases litigation costs and provides an unearned windfall to Plaintiffs and their counsel.

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¹ 22-1068 (La. 2022) 355 So.3d 583.
² 23-554 (La.App. 5th Cir. 2024) 399 So.3d 140.
³ Reuters-North Carolina becomes first state to ban third-party litigation funding by David Thomas June 23, 2026

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