Senate committee substitute to the 2nd edition replaces the prior edition in its entirety with the following. Makes conforming changes to act’s long title.

Part I.

Enacts Article 52, the Prohibit Litigation Investments Act, to GS Chapter 66 (Act) to broadly prohibit non-party investment in legal claims and prevent the transformation of the civil justice system into a market for financial investment so that North Carolinians can avail themselves of their right to access the civil justice system free from improper foreign financial influences. Contains seven findings on how litigation investment undermines the civil justice system and threatens national security. States the State’s policy that the civil justice system function to resolve disputes on the merits between the parties to the proceeding, redress injured parties for civil wrongs, provide consistent and fair treatment to all parties, and, above all, to mete out justice.

Defines three terms, including litigation investment, which means 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. Excludes nine types of legal assistance from the definition including:

• the provision of legal services on a contingency basis in accordance with the North Carolina Rules of Professional Conduct,
• an attorney or law firm's advancement of costs and expenses in accordance with the North Carolina Rules of Professional Conduct,
• an insurer's or other entity’s contractual obligation to defend or indemnify a party to a civil proceeding,
• the provision of money to or by a nonprofit legal services organization for the pro bono, cost-free representation of a client in a civil proceeding so long as any repayment amount is limited to the original amount plus reasonable interest, and
• an immediate family member's provision of money or other financial support to a party for fees, costs, and expenses of a civil proceeding or for personal and household expenses during the pendency of a civil proceeding, regardless of whether the immediate family member receives a right to any portion of the judgment, settlement, or other monetary relief the party recovers in the civil proceeding or any other right to receive repayment or other consideration that is contingent in any respect on the outcome of the civil proceeding.

Makes it 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 in GS 66-514.

Voids any contract in violation of the Act in GS 66-515. Gives the Attorney General the right to bring a civil action to enjoin violations of the Act and authorizes the court to impose a civil penalty of up to $50,000 for each violation in such proceedings. Gives parties injured by violations of the Act the right to bring an action to recover damages, with recovery of statutory damages measured by treble the amount of full potential litigation investment contemplated by the investor. Specifies that the potential defendants in either action has purposefully availed themselves of the privileges of conducting business in the State and is subject to suit here, whether they have transacted business in the State or not. Specifies that the remedies in GS 66-515 are in addition to any other remedies provided for by law. Directs that the Act be liberally construed to effect its purpose in GS 66-516.

Applies to civil proceedings commenced on or after the act becomes law.

Part II.

Amends GS 97-29 (Rates and duration of compensation for total incapacity) to increase the minimum weekly workers compensation for total disability from $30 to $50. Requires the Industrial Commission to increase the maximum weekly compensation provided under the statute based on the percentage change of the Consumer Price Index over the previous year, beginning July 1, 2026, and annually thereafter. Effective July 1, 2026.

Effective July 1, 2026, amends GS 97-31 (Schedule of injuries; rate and period of compensation), to make the maximum compensation for serious facial or head disfigurement $32,000 (was, $20,000), serious bodily disfigurement $16,000 (was, $10,000), and loss or permanent injury to any important external or internal organ or part of the body $32,000 (was, $20,000).

Effective July 1, 2027, amends GS 97-31 as amended by the act, to make the maximum compensation for serious facial or head disfigurement $44,000, serious bodily disfigurement $22,000, and loss or permanent injury to any important external or internal organ or part of the body $44,000.

Effective July 1, 2028, amends GS 97-31 as amended by the act, to make the maximum compensation for serious facial or head disfigurement $56,000, serious bodily disfigurement $28,000, and loss or permanent injury to any important external or internal organ or part of the body $56,000. Requires the Industrial Commission to increase the maximum compensation for these injuries based on the percentage change of the Consumer Price Index over the previous year, beginning July 1, 2029, and annually thereafter.