Corporate Litigation Investment Law (AB2305)
Summary
California Governor signed AB2305 into law on April 6, 2026, creating Article 7.5 in Chapter 4 of Division 3 of the Business and Professions Code. The new law establishes regulatory requirements for corporate investment in litigation practice and attorney participation in such arrangements. The bill passed the Assembly unanimously (68-0) after receiving a do-pass recommendation (12-0) from the Judiciary Committee.
What changed
California enacted Assembly Bill 2305, establishing a new regulatory framework for corporate investment in litigation. The law adds Article 7.5 to Chapter 4 of Division 3 of the Business and Professions Code, directly regulating attorney conduct and business relationships involving third-party litigation funding. This represents a significant expansion of attorney professional responsibility rules in California.
Affected parties include attorneys and law firms engaging in or facilitating corporate litigation investment, as well as companies providing litigation financing. The new law introduces compliance obligations including potential disclosure requirements, ethical standards, and restrictions on fee arrangements with litigation investors. Legal professionals should review client engagement letters and litigation funding agreements to ensure alignment with the new statutory requirements.
What to do next
- Review internal policies on third-party litigation funding arrangements
- Ensure compliance with new disclosure and conduct requirements under Business and Professions Code Article 7.5
- Assess litigation investment practices against new regulatory standards
Archived snapshot
Apr 7, 2026GovPing captured this document from the original source. If the source has since changed or been removed, this is the text as it existed at that time.
ChangeBridge / California / AB2305 Signed by Governor AB2305 Assembly Bill Signed by Governor 2026-04-06
Corporate investment in litigation practice.
An act to add Article 7.5 (commencing with Section 6134) to Chapter 4 of Division 3 of the Business and Professions Code, relating to attorneys.
Bill Details
State California
Session 2025-2026 Regular Session
Chamber House
Committee Rules
Official Source leginfo.legislature.ca.gov/faces/billStatu...
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Sponsors
Ash Kalra (Rep - D) Catherine Stefani (Rep - D) Rick Zbur (Rep - D)
Action History
2026-04-06 S In Senate. Read first time. To Com. on RLS. for assignment. 2026-04-06 A Read third time. Passed. Ordered to the Senate. (Ayes 68. Noes 0.) 2026-03-26 A Read second time. Ordered to third reading. 2026-03-25 A Read second time and amended. Ordered returned to second reading. 2026-03-24 A From committee: Amend, and do pass as amended. (Ayes 12. Noes 0.) (March 24). 2026-03-17 A Re-referred to Com. on JUD. 2026-03-16 A From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended. 2026-03-09 A Referred to Com. on JUD. 2026-02-20 A From printer. May be heard in committee March 22. 2026-02-19 A Read first time. To print.
Votes
2026-03-24 Do pass as amended Yea: 12 Nay: 0 2026-04-06 AB 2305 Kalra Assembly Third Reading Yea: 68 Nay: 0
Committee Referrals
2026-03-09 A Judiciary 2026-04-06 S Rules
Bill Text Versions
2026-02-19 Introduced 2026-03-16 Amended 2026-03-25 Amended Legislative data powered by LegiScan (CC BY 4.0)
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