Bill > HB1274

This bill establishes the Maryland Transparency in Third-Party Litigation Financing Act, which creates comprehensive regulations for litigation financing transactions in the state. The bill defines litigation financing as monetary advances to consumers or their legal representatives where repayment is contingent on the outcome of a civil action, and mandates detailed disclosure requirements for litigation financing contracts. These contracts must include specific information such as the financier's contact details, an itemization of charges, total funded amount, potential tax implications, and clear statements about the consumer's rights, including a five-day cancellation period. The bill prohibits litigation financiers from engaging in practices like charging excessive interest, making misleading advertisements, offering legal advice, or attempting to influence lawsuit decisions. In class action lawsuits, litigation financiers are required to owe a fiduciary duty to class members and disclose any relationships with legal representatives. The Attorney General is empowered to enforce these provisions, and any violation can render the financing contract void. The act is designed to promote consumer protection and transparency in third-party litigation financing by ensuring consumers fully understand the terms and potential implications of such financial arrangements. The law will take effect on October 1, 2025, and will only apply to litigation financing contracts entered into after that date.

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https://mgaleg.maryland.gov/mgawebsite/Legislation/Details/HB1274?ys=2025RS