Rhode Island 2023 Regular Session

Rhode Island House Bill H5926

Introduced
3/1/23  

Caption

Procedure Generally -- Third-party Litigation Financing Consumer Protection Act

Impact

The enactment of HB 5926 will significantly affect the landscape of litigation financing in the state. It includes provisions that require litigation financers to register with the Secretary of State and to obtain a surety bond, ensuring that they are held accountable for their business practices. The bill also mandates detailed disclosures in financing contracts, giving consumers more comprehensive information about the terms and potential implications of such financing. This move toward consumer protection is intended to avoid exploitation and ensure that consumers are not misled by opaque financial agreements.

Summary

House Bill 5926, also known as the Third-Party Litigation Financing Consumer Protection Act, aims to regulate the practice of litigation financing in Rhode Island. The bill establishes a framework for transparency and accountability in the dealings between consumers and litigation financers. By defining key terms such as 'litigation financer' and 'litigation financing transaction', the bill provides clarity on what constitutes these practices and seeks to protect consumers engaged in legal disputes where outside funding is utilized.

Contention

While supporters of HB 5926 argue that it enhances consumer rights and promotes transparency in what can be a shadowy industry, there are concerns about practical implications for both consumers and litigation financers. Critics suggest that it may lead to increased costs in litigation financing, as more stringent regulations often do. Moreover, there are discussions around the balance between protecting consumers and overregulating an industry that some see as a necessary financial resource for those unable to afford lengthy legal battles. The segmentation between personal and commercial claims is another point of debate, raising concerns about equitable access to justice.

Companion Bills

No companion bills found.

Previously Filed As

RI S0632

Procedure Generally -- Third-party Litigation Financing Consumer Protection Act

RI H7414

Third-party Litigation Financing Consumer Protection Act

RI S2783

Third-party Litigation Financing Consumer Protection Act

RI HB1274

Consumer Protection - Third-Party Litigation Financing

RI SB985

Consumer Protection - Third-Party Litigation Financing

RI H5221

Comprehensively regulates the practices of third-party litigation financiers in Rhode Island.

RI S0534

Comprehensively regulates the practices of third-party litigation financiers in Rhode Island.

RI SB581

Third-party litigation financing.

RI SB269

Establish consumer protections and disclosures in litigation financing

RI S2212

Comprehensively regulates the practices of third-party litigation financers in Rhode Island.

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