Bill > H7080

This bill establishes comprehensive regulations for "litigation financing," which is when an entity other than the parties involved in a lawsuit, their lawyers, or insurers provides funds for litigation activities or related claims in exchange for a portion of any potential recovery. The Department of Business Regulation (DBR) will oversee these practices, requiring litigation financers to register, post a bond of at least $50,000, and adhere to strict rules. These rules prohibit financers from paying referral fees to legal representatives or medical providers, advertising falsely, or influencing the conduct of a legal claim or settlement, with the consumer and their attorney retaining sole decision-making power. Contracts must be fully completed, clearly disclose terms including a five-day cancellation period, and prominently state that the consumer owes nothing if there is no recovery or insufficient funds to repay the financer. Legal representatives involved must acknowledge they have no financial interest in the financing and share any agreements with their clients. The bill also mandates disclosure of litigation financing agreements in civil actions, allows for discovery of such arrangements in personal injury cases, and requires annual reporting from financers to the DBR, with a confidential report to legislative committees and a public version with personally identifiable information removed. While commercial litigation financing is generally exempt, this exemption does not apply to claims arising from personal injuries. Any violation of these provisions will render the litigation financing contract unenforceable by the financer.

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