Bill > H1182

This bill establishes comprehensive regulations for commercial litigation financing in Massachusetts, creating a new Chapter 167K in the state's General Laws. The bill requires commercial litigation financiers to register with the Division of Banks, submit to background checks, and obtain a renewable two-year registration that ensures they will operate honestly and fairly. Financiers must disclose the number and amount of litigation fundings annually, while being prohibited from entering agreements with foreign entities of concern. The bill introduces several key consumer protections, including preventing litigation financiers from influencing legal strategies or case decisions, mandating that such decisions remain solely with the claimant and their attorney. Attorneys must disclose the existence of any litigation financing agreements to their clients and to other parties in the legal claim, and these agreements are subject to potential discovery. The bill also establishes that communications with litigation financiers are not privileged and requires transparent reporting about funding arrangements. Importantly, the legislation imposes a fiduciary duty on litigation financiers to the claimants they are funding and restricts their ability to control or direct legal proceedings. The bill aims to bring transparency and accountability to the litigation financing industry while protecting the interests of claimants and maintaining the integrity of legal processes.

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https://malegislature.gov/Bills/194/H1182