| 1 | 1 | | Senate Study Bill 1122 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON JUDICIARY BILL BY CHAIRPERSON SCHULTZ) A BILL FOR An Act regulating litigation financing contracts, and including 1 effective date and applicability provisions. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 2681XC (1) 91 cm/jh |
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| 3 | 3 | | S.F. _____ Section 1. NEW SECTION . 537C.1 Title. 1 This chapter shall be known as the Litigation Financing 2 Transparency and Consumer Protection Act . 3 Sec. 2. NEW SECTION . 537C.2 Definitions. 4 As used in this chapter, unless otherwise required by the 5 context: 6 1. Consumer means any individual who resides, is present, 7 or is domiciled in this state or who is or may become a 8 plaintiff, claimant, or complainant in a civil action or an 9 administrative proceeding or in pursuit of any claim or cause 10 of action in this state. 11 2. Entity means any domestic or foreign corporation, 12 partnership, limited partnership, limited liability company, 13 trust, fund, plan, or any other business, enterprise, 14 association, or organization of any kind or nature. 15 3. Foreign country of concern means a foreign government 16 listed in 15 C.F.R. 7.4. 17 4. Foreign entity of concern means a partnership, 18 association, corporation, organization, or other combination of 19 persons that is any of the following: 20 a. Organized or incorporated in a foreign country of 21 concern. 22 b. Owned or controlled by the government, a political 23 subdivision, or a political party of a foreign country of 24 concern. 25 c. That has a principal place of business in a foreign 26 country of concern. 27 d. That is owned, organized, or controlled by or affiliated 28 with a foreign organization that has been: 29 (1) Placed on the federal office of foreign assets control 30 specially designated nationals and blocked persons list. 31 (2) Designated by the United States secretary of state as a 32 foreign terrorist organization. 33 5. Foreign person means any of the following: 34 a. An individual who is not a citizen of the United States 35 -1- LSB 2681XC (1) 91 cm/jh 1/ 16 |
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| 5 | 5 | | S.F. _____ or an alien lawfully admitted for permanent residence in the 1 United States. 2 b. An unincorporated association, of which a majority 3 of members are not citizens of the United States or aliens 4 lawfully admitted for permanent residence in the United States. 5 c. A corporation that is not incorporated in the United 6 States. 7 d. The government, a political subdivision, or a political 8 party of a country other than the United States. 9 e. An entity that is organized under the laws of a country 10 other than the United States. 11 f. An entity that has a principal place of business in a 12 country other than the United States and that has shares or 13 other ownership interest held by the government or a government 14 official of a country other than that of the United States. 15 g. An employee, official, or member of any entity described 16 in paragraphs b through f . 17 6. Legal representative means any attorney, group 18 of attorneys, or law firm duly licensed and authorized to 19 practice law and to represent a consumer in a civil action, 20 administrative proceeding, or claim to recover damages in this 21 state. 22 7. Litigation financer means any person or group of 23 persons engaged in, formed, created, or established for the 24 purpose of engaging in the business of litigation financing or 25 any other business or economic activity in which a person or 26 group of persons receive consideration of any kind in exchange 27 for providing litigation financing. 28 8. Litigation financing means the financing, funding, 29 advancing, or loaning of money to pay fees, costs, expenses, or 30 any other sums arising from or in any manner related to a civil 31 action, administrative proceeding, claim, or cause of action, 32 if the financing, funding, advancing, or loaning of money is 33 provided by any person other than a person who is any of the 34 following: 35 -2- LSB 2681XC (1) 91 cm/jh 2/ 16 |
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| 7 | 7 | | S.F. _____ a. A party to the civil action, administrative proceeding, 1 claim, or cause of action. 2 b. A legal representative engaged, directly or indirectly 3 through another legal representative, to represent a party in 4 a civil action, administrative proceeding, claim, or cause of 5 action. 6 c. An entity or insurer with a preexisting contractual 7 obligation to indemnify or defend a party in a civil action, 8 administrative proceeding, claim, or cause of action. 9 9. a. Litigation financing contract means a written 10 contract in which a person agrees to provide litigation 11 financing to any person in conjunction with a civil action or 12 an administrative proceeding or in pursuit of any claim or 13 cause of action in consideration for any of the following: 14 (1) The payment of interest, fees, or other consideration to 15 the person providing the litigation financing. 16 (2) Granting or assigning to the person providing the 17 litigation financing a right to receive payment from the 18 value of any proceeds or other consideration realized from 19 any judgment, award, settlement, verdict, or other form of 20 monetary relief any consumer, legal representative, or other 21 person may receive or recover in relation to the civil action, 22 administrative proceeding, claim, or cause of action. 23 b. Litigation financing contract does not include any 24 agreement, contract, or engagement of a legal representative 25 to render legal services to a consumer on a contingency fee 26 basis, including the advancement of legal costs by the legal 27 representative, in which the services or costs are provided 28 to or on behalf of a consumer by the legal representative 29 representing the consumer in the civil action, administrative 30 proceeding, claim, or cause of action. 31 10. Person means an individual or an entity. 32 11. Regulated lender means any of the following: 33 a. A bank, building and loan association, savings and loan 34 association, trust company, credit union, credit association, 35 -3- LSB 2681XC (1) 91 cm/jh 3/ 16 |
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| 9 | 9 | | S.F. _____ consumer loan licensee, deferred deposit loan licensee, 1 residential mortgage lender licensee, development corporation, 2 bank holding company, or mutual or stock insurance company 3 organized pursuant to state or federal statutory authority and 4 subject to supervision, control, or regulation by any of the 5 following: 6 (1) An agency of the state of Iowa. 7 (2) An agency of the federal government. 8 b. A subsidiary of an entity described in paragraph a . 9 c. An Iowa state agency or a federal agency that is 10 authorized to lend money. 11 d. A corporation or other entity established by congress or 12 the state of Iowa that is owned, in whole or in part, by the 13 United States or the state of Iowa and that is authorized to 14 lend money. 15 Sec. 3. NEW SECTION . 537C.3 Registration. 16 1. A person shall not engage in litigation financing in this 17 state unless the person is registered with the secretary of 18 state as a litigation financer pursuant to this chapter. 19 2. If the person registering as a litigation financer is an 20 entity: 21 a. The entity must be active and in good standing as 22 reflected in the office of the secretary of state. 23 b. The entitys articles of incorporation, charter, articles 24 of organization, certificate of limited partnership, or other 25 organizational or governing document must contain a statement 26 that the entity has the power to engage in the business of 27 litigation financing and is designated as a litigation financer 28 pursuant to this chapter. 29 3. To register as a litigation financer, a person shall file 30 a registration statement with the secretary of state setting 31 forth all of the following information: 32 a. The legal name of the litigation financer. 33 b. The physical street address and mailing address of the 34 litigation financer. 35 -4- LSB 2681XC (1) 91 cm/jh 4/ 16 |
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| 11 | 11 | | S.F. _____ c. A telephone number or electronic mail address through 1 which the litigation financer may be contacted. 2 d. The physical street address and mailing address of the 3 licensed financers registered office and the name of the 4 registered agent at the registered office who is authorized to 5 accept service of process on behalf of the licensed financer. 6 e. Any other information the secretary of state considers 7 necessary. 8 4. If the person seeking to register as a litigation 9 financer is an entity, the following information must be set 10 forth in the registration statement with respect to each person 11 that, directly or indirectly, owns, controls, holds with the 12 power to vote, or holds proxies representing five percent or 13 more of the voting securities of the litigation financer: 14 a. The legal name, physical street address, and mailing 15 address of each person. 16 b. If the person is an individual, all of the following: 17 (1) The individuals occupation. 18 (2) Any offices and positions held with the litigation 19 financer during the past five years. 20 (3) Any conviction of a crime other than misdemeanor traffic 21 violations during the past ten years. 22 c. If the person is an entity, all of the following: 23 (1) The nature of the entitys business operations, if 24 any, during the past five years or a description of the 25 business intended to be done by the entity and the entitys 26 subsidiaries, if any. 27 (2) A list of all individuals who are or who have been 28 selected to become directors or officers of the entity and 29 each subsidiary of the entity. The list must include for each 30 individual the information required by paragraph b . 31 5. A litigation financer subject to registration under this 32 chapter shall file an amended registration within thirty days 33 whenever the information contained in the most recently filed 34 registration changes or becomes inaccurate or incomplete in any 35 -5- LSB 2681XC (1) 91 cm/jh 5/ 16 |
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| 13 | 13 | | S.F. _____ respect. 1 6. The secretary of state is authorized to prescribe the 2 forms and the filing fees the secretary of state considers 3 necessary for the purposes of this chapter. 4 7. All documents and information filed with the secretary of 5 state pursuant to this section are public records. 6 8. The secretary of states duty to file documents under 7 this section is ministerial. The secretary of states filing 8 or refusing to file a document does not create a presumption 9 of any of the following: 10 a. That the document does or does not conform to the 11 requirements of this chapter. 12 b. That the information contained in the document is correct 13 or incorrect. 14 Sec. 4. NEW SECTION . 537C.4 Litigation financing 15 protections. 16 1. A litigation financer shall not do any of the following: 17 a. Pay or offer commissions, referral fees, rebates, or 18 other forms of consideration to any person in exchange for 19 referring a consumer to a litigation financer. 20 b. Accept any commissions, referral fees, rebates, or other 21 forms of consideration from any person providing any goods or 22 rendering any services to the consumer. 23 c. Charge a rate of interest that exceeds the rate of 24 interest allowed under chapter 535. 25 d. Receive or recover any payment that exceeds twenty-five 26 percent of the amount of any judgment, award, settlement, 27 verdict, or other form of monetary relief obtained in the civil 28 action, administrative proceeding, claim, or cause of action 29 that is the subject of the litigation contract. 30 e. Advertise false or misleading information regarding the 31 litigation financers products or services. 32 f. Refer or require any consumer to hire or engage any 33 person providing any goods or rendering any services to the 34 consumer. 35 -6- LSB 2681XC (1) 91 cm/jh 6/ 16 |
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| 15 | 15 | | S.F. _____ g. Fail to promptly deliver a fully completed and signed 1 litigation financing contract to the consumer and the 2 consumers legal representative. 3 h. Attempt to secure a remedy or obtain a waiver of any 4 remedy, including but not limited to compensatory, statutory, 5 or punitive damages, that the consumer may or may not be 6 entitled to pursue or recover otherwise. 7 i. Offer or provide legal advice to the consumer. 8 j. Assign, including securitizing, a litigation financing 9 contract in whole or in part. 10 k. Report a consumer to a credit reporting agency if 11 insufficient funds remain to repay the litigation financer 12 in full from the proceeds received from any judgment, award, 13 settlement, verdict, or other form of monetary relief obtained 14 in the civil action, administrative proceeding, claim, or cause 15 of action that is the subject of the litigation financing 16 contract. 17 l. Demand, request, receive, or exercise any right to 18 influence, affect, or otherwise make any decision in the 19 handling, conduct, administration, litigation, settlement, or 20 resolution of any civil action, administrative proceeding, 21 claim, or cause of action in which the litigation financer has 22 provided litigation financing. All rights remain solely with 23 the consumer and the consumers legal representative. 24 2. A person who provides any goods or renders any services 25 to the consumer shall not have a financial interest in 26 litigation financing and shall not receive any commissions, 27 referral fees, rebates, or other forms of consideration from 28 any litigation financer or the litigation financers employees, 29 owners, or affiliates. 30 Sec. 5. NEW SECTION . 537C.5 Litigation financing contract 31 disclosures. 32 1. The terms and conditions of a litigation financing 33 contract must be set forth in a fully completed written 34 contract with no terms or conditions omitted. The litigation 35 -7- LSB 2681XC (1) 91 cm/jh 7/ 16 |
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| 17 | 17 | | S.F. _____ financing contract must contain all terms and conditions at 1 the time it is signed by any party to the litigation financing 2 contract. 3 2. On execution of a litigation financing contract, a 4 litigation financer shall not amend the terms or conditions of 5 the litigation financing contract without full disclosure to 6 and the prior written consent of all parties to the litigation 7 financing contract. 8 3. A litigation financing contract must set forth the name, 9 physical street address, and mailing address of the litigation 10 financer on the first page of the litigation financing 11 contract. 12 4. A litigation financing contract must contain the 13 following disclosures that constitute material terms and 14 conditions of the litigation financing contract and must be 15 typed in at least fourteen point bold font and be placed 16 clearly and conspicuously immediately above the consumers 17 signature line in the litigation financing contract: 18 IMPORTANT DISCLOSURES PLEASE READ CAREFULLY 19 Right to Cancellation: You may cancel this litigation 20 financing contract without penalty or further obligation within 21 five business days from the date you sign this contract or 22 the date you receive financing from the litigation financer, 23 whichever date is later. You may cancel by sending a notice 24 of cancellation to the litigation financer and returning to 25 the litigation financer any funds received from the litigation 26 financer at the litigation financers address set forth on the 27 first page of this contract. 28 The maximum amount the litigation financer may receive or 29 recover from any contingent payment shall not exceed twenty 30 five percent of the amount of any judgment, award, settlement, 31 verdict, or other form of monetary relief obtained in the civil 32 action, administrative proceeding, claim, or cause of action 33 that is the subject of this litigation contract. 34 The litigation financer agrees that it has no right to, 35 -8- LSB 2681XC (1) 91 cm/jh 8/ 16 |
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| 19 | 19 | | S.F. _____ and will not demand, request, receive, or exercise any right 1 to, influence, affect, or otherwise make any decision in the 2 handling, conduct, administration, litigation, settlement, or 3 resolution of your civil action, administrative proceeding, 4 claim, or cause of action. All of these rights remain solely 5 with you and your legal representative. 6 If there is no recovery of any money from your civil action, 7 administrative proceeding, claim, or cause of action, or if 8 there is not enough money to satisfy in full the portion 9 assigned to the litigation financer, you will not owe anything 10 in excess of your recovery. 11 You are entitled to a fully completed contract with no terms 12 or conditions omitted prior to signing. Before signing this 13 contract, you should read the contract completely and consult 14 an attorney. 15 5. If the consumer is represented by a legal representative 16 in the civil action, administrative proceeding, claim, or cause 17 of action that is the subject of the litigation financing 18 contract, the legal representative shall acknowledge in 19 the contract that the legal representative and the legal 20 representatives employer and employees have not received or 21 paid a referral fee or any other consideration from or to the 22 litigation financer and have no obligation to do so in the 23 future. 24 6. If the consumers legal representative is a party to a 25 litigation financing contract related to the consumers civil 26 action, administrative proceeding, claim, or cause of action 27 that is the subject of the litigation financing contract, the 28 legal representative shall disclose and deliver the litigation 29 financing contract to the consumer. Following this disclosure 30 and delivery, the consumer shall sign an acknowledgment that 31 the consumer has read and understands the terms and conditions 32 of the litigation financing contract and the consumer must be 33 provided with a copy of the acknowledgment. 34 Sec. 6. NEW SECTION . 537C.6 Disclosure and discovery of 35 -9- LSB 2681XC (1) 91 cm/jh 9/ 16 |
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| 21 | 21 | | S.F. _____ litigation financing contracts. 1 1. a. Except as otherwise stipulated or ordered by the 2 court, a consumer or the consumers legal representative shall, 3 without awaiting a discovery request, disclose and deliver to 4 all of the following persons the litigation financing contract: 5 (1) Each party to the civil action, administrative 6 proceeding, claim, or cause of action, or to each partys legal 7 representative. 8 (2) The court, agency, or tribunal in which the civil 9 action, administrative proceeding, claim, or cause of action 10 may be pending. 11 (3) Any known person, including an insurer, with a 12 preexisting contractual obligation to indemnify or defend a 13 party to the civil action, administrative proceeding, claim, 14 or cause of action. 15 b. The disclosure obligation under paragraph a exists 16 regardless of whether a civil action or an administrative 17 proceeding has commenced. 18 c. The disclosure obligation under paragraph a is a 19 continuing obligation, and within thirty days of entering 20 into a litigation financing contract or amending an existing 21 litigation financing contract, the consumer or the consumers 22 legal representative shall disclose and deliver any new or 23 amended litigation financing contracts. 24 d. The existence of the litigation financing contract 25 and all participants or parties to a litigation financing 26 contract are permissible subjects of discovery in any civil 27 action, administrative proceeding, claim, or cause of action 28 to which litigation financing is provided under the litigation 29 financing contract, regardless of whether a civil action or an 30 administrative proceeding has commenced. 31 2. a. In a civil proceeding in which a plaintiff enters 32 into a litigation financing contract that is directly or 33 indirectly financed by a foreign person, the plaintiff or the 34 plaintiffs attorney shall provide a written notice that the 35 -10- LSB 2681XC (1) 91 cm/jh 10/ 16 |
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| 23 | 23 | | S.F. _____ plaintiff has entered into a litigation financing contract to 1 all of the following: 2 (1) Any other party in the civil proceeding. 3 (2) Each insurer that has a duty to defend another party in 4 the civil proceeding. 5 b. A plaintiff or the plaintiffs attorney shall provide the 6 written notice required by paragraph a within a reasonable 7 time after the date on which the litigation financing contract 8 was executed. 9 Sec. 7. NEW SECTION . 537C.7 Exemptions. 10 This chapter does not apply to any of the following: 11 1. A nonprofit organization that provides litigation 12 financing, directly or indirectly, for the benefit of the 13 nonprofit organization or one or more of the nonprofit 14 organizations members without receiving, in consideration for 15 the litigation financing, any of the following: 16 a. The payment of interest, fees, or other consideration. 17 b. Except for in-house counsel of the nonprofit 18 organization, any right to recovery or payment from the amount 19 of any judgment, award, settlement, verdict, or other form of 20 monetary relief obtained in the civil action, administrative 21 proceeding, claim, or cause of action. 22 2. Any litigation financing provided by an entity engaged in 23 commerce or business activity, but only if the entity does not 24 do any of the following: 25 a. Charge or collect any interest, fees, or other 26 consideration. 27 b. Retain or receive any financial interest in the outcome 28 of the civil action, administrative proceeding, claim, or cause 29 of action. 30 c. Receive any right to recovery or payment from the amount 31 of any judgment, award, settlement, verdict, or other form of 32 monetary relief obtained in the civil action, administrative 33 proceeding, claim, or cause of action. 34 3. A regulated lender that does not receive, in 35 -11- LSB 2681XC (1) 91 cm/jh 11/ 16 |
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| 25 | 25 | | S.F. _____ consideration for loaning money to any person, a right to 1 receive payment from the value of any proceeds or other 2 consideration realized from any judgment award, settlement, 3 verdict, or other form of monetary relief any person 4 may receive or recover in relation to any civil action, 5 administrative proceeding, claim, or cause of action. 6 Sec. 8. NEW SECTION . 537C.8 Class actions. 7 This chapter shall apply to any civil action filed or 8 certified as a class action in which litigation financing 9 is provided. A litigation financer owes a fiduciary 10 duty to all class members or intended beneficiaries of a 11 certified class and shall act in a manner consistent with the 12 litigation financers fiduciary duty throughout the civil 13 action. In addition to the disclosure requirements, the 14 legal representative of the putative class shall disclose 15 to all parties, putative class members, and the court any 16 legal, financial, or other relationship between the legal 17 representative and the litigation financer. A class member is 18 entitled to receive from the class counsel a true and correct 19 copy of the litigation financing contract on request. 20 Sec. 9. NEW SECTION . 537C.9 Joint and several liability for 21 costs. 22 A litigation financer is jointly and severally liable for 23 any award or order imposing or assessing costs or monetary 24 sanctions against a consumer arising from or relating to any 25 civil action, administrative proceeding, claim, or cause 26 of action for which the litigation financer is providing 27 litigation financing. 28 Sec. 10. NEW SECTION . 537C.10 Regulatory oversight 29 rulemaking. 30 The secretary of state may adopt rules and other policies in 31 overseeing the practice of litigation financing consistent with 32 this chapter. 33 Sec. 11. NEW SECTION . 537C.11 Violation unenforceable 34 contract. 35 -12- LSB 2681XC (1) 91 cm/jh 12/ 16 |
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| 27 | 27 | | S.F. _____ 1. Any violation of this chapter by the litigation financer 1 renders the litigation financing contract unenforceable by 2 the litigation financer or any successor-in-interest to the 3 litigation financing contract. 4 2. If a litigation financer charges a rate of interest that 5 exceeds the rate of interest allowed under chapter 535, the 6 litigation financer shall be subject to a penalty for usury and 7 an action to recover excessive interest as authorized under 8 chapter 535. 9 Sec. 12. NEW SECTION . 537C.12 Foreign entity litigation 10 financer. 11 A litigation financer shall not provide funding to a 12 litigation financing contract that is directly or indirectly 13 financed by a foreign entity of concern. 14 Sec. 13. EFFECTIVE DATE. This Act takes effect January 1, 15 2026. 16 Sec. 14. APPLICABILITY. This Act applies to any civil 17 action or administrative proceeding involving a litigation 18 financer pending on or commenced on or after January 1, 2026. 19 EXPLANATION 20 The inclusion of this explanation does not constitute agreement with 21 the explanations substance by the members of the general assembly. 22 This bill creates the litigation financing transparency and 23 consumer protection Act. 24 The bill requires the registration of litigation financers 25 with the secretary of state. The bill provides registration 26 requirements and procedures for the litigation financer. The 27 bill provides that all documents and information filed with the 28 secretary of state pursuant to the registration of the ligation 29 financer are public records. 30 The bill provides limitations on how a litigation financer 31 may conduct business. A litigation financer may not (1) pay or 32 offer any form of consideration to any person in exchange for 33 referring a consumer to a litigation financer, (2) accept any 34 type of consideration from any person providing any goods or 35 -13- LSB 2681XC (1) 91 cm/jh 13/ 16 |
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| 29 | 29 | | S.F. _____ rendering any services to the consumer, (3) charge a rate of 1 interest that exceeds the rate of interest allowed under Code 2 chapter 535 (money and interest), (4) receive or recover any 3 payment that exceeds 25 percent of the reward obtained in the 4 action subject to the litigation contract, (5) advertise false 5 or misleading information regarding the litigation financer 6 products or services, (6) refer or require any consumer to 7 hire or engage any person providing any goods or rendering 8 any services to the consumer, (7) fail to promptly deliver 9 a fully completed and signed litigation financing contract 10 to the consumer and the consumers legal representative, (8) 11 attempt to secure a remedy or obtain a waiver of any remedy, 12 including but not limited to compensatory, statutory, or 13 punitive damages, (9) offer or provide legal advice to the 14 consumer, (10) assign a litigation financing contract in whole 15 or in part, (11) report a consumer to a credit reporting 16 agency, or (12) demand, request, receive, or exercise any right 17 to influence, affect, or otherwise make any decision in the 18 handling, conduct, administration, litigation, settlement, or 19 resolution of any civil action, administrative proceeding, 20 claim, or cause of action in which the litigation financer has 21 provided litigation financing. The bill also provides that a 22 person who provides any goods or renders any services to the 23 consumer shall not have a financial interest in litigation 24 financing. 25 The bill provides the terms, conditions, and disclosures 26 required in a litigation financer contract. Upon execution 27 of the contract, the litigation financer may not amend any 28 terms or conditions of the contract without full disclosure and 29 written consent of all parties. 30 The bill provides that a consumer or legal representative 31 of a consumer, unless otherwise stipulated or ordered by the 32 court, shall disclose and deliver the litigation financing 33 contract to each party of the matter, the court, and any known 34 person with a contractual obligation in the matter. 35 -14- LSB 2681XC (1) 91 cm/jh 14/ 16 |
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| 31 | 31 | | S.F. _____ The bill requires the plaintiff or the plaintiffs attorney 1 to provide written notice of a commercial litigation financing 2 contract to any party in the matter and each insurer with 3 a duty to defend a party in the matter if the contract is 4 directly or indirectly financed by a foreign person. 5 The bill provides exemptions to the new Code chapter, 6 including: (1) a nonprofit organization that provides 7 litigation financing for the benefit of the nonprofit 8 organization or one or more of the nonprofit organizations 9 members; (2) an entity engaged in commerce or business 10 activity, but only if the entity does not: charge or collect 11 any interest, fees, or other consideration; retain or receive 12 any financial interest in the outcome of the civil action, 13 administrative proceeding, claim, or cause of action; and 14 receive any right to recovery or payment from the amount of any 15 judgment, award, settlement, verdict, or other form of monetary 16 relief obtained in the matter; or (3) a regulated lender that 17 does not receive a right to receive payment from the value of 18 any proceeds or other consideration realized from any reward 19 received or recovered in relation to the matter. 20 The bill provides that the new Code chapter applies to class 21 actions. 22 The bill provides that a litigation financer is jointly and 23 severally liable for any award or order imposing or assessing 24 costs or monetary sanctions against a consumer arising from 25 or relating to matters for which the litigation financer is 26 providing litigation financing. 27 The bill authorizes the secretary of state to adopt rules or 28 other policies to enforce the new Code chapter. 29 The bill provides that any violation of the new Code chapter 30 by the litigation financer shall render the contract void and 31 may be subject to penalties. 32 The bill provides that a commercial litigation financer 33 shall not provide funding to a commercial litigation financing 34 contract that is financed by a foreign entity of concern. 35 -15- LSB 2681XC (1) 91 cm/jh 15/ 16 |
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| 33 | 33 | | S.F. _____ The bill takes effect on January 1, 2026, and applies to 1 any civil action or administrative proceeding involving a 2 litigation financer pending on or commenced after January 1, 3 2026. 4 -16- LSB 2681XC (1) 91 cm/jh 16/ 16 |
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