As Introduced
136th General Assembly
Regular Session S. B. No. 10
2025-2026
Senators Wilson, Lang
A B I LL
To enact sections 1357.01, 1357.011, 1357.02,
1357.03, 1357.04, 1357.05, 1357.06, 1357.07, and
1357.08 and to repeal section 1349.55 of the
Revised Code to revise and supplement state
regulations concerning non-recourse litigation
funding agreements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1357.01, 1357.011, 1357.02,
1357.03, 1357.04, 1357.05, 1357.06, 1357.07, and 1357.08 of the
Revised Code be enacted to read as follows:
Sec. 1357.01. As used in this chapter:
(A)(1) "Advertise" means directly or indirectly
publishing, disseminating, circulating, or placing before the
public any written, oral, electronic, or printed communication
for the purpose of inducing a consumer to enter into a consumer
litigation funding agreement.
(2) For the purposes of division (A)(1) of this section,
"written, oral, electronic, or printed communication" includes
communication by means of recorded telephone messages and
transmission or broadcast on radio, television, the internet, or
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other similar media of audio recordings, film strips, motion
pictures, or videos.
(B)(1) "Charges" means the amount of money to be paid to
the consumer litigation funding company by or on behalf of a
consumer in excess of the funded amount.
(2) "Charges" include interest and all administrative,
origination, underwriting, and other fees, no matter how
denominated.
(C)(1) "Commercial litigation financier" means a person
engaged in the business of entering into commercial litigation
financing agreements with claimants or with lawyers or law firms
asserting legal claims on behalf of claimants.
(2) "Commercial litigation financier" does not include a
nonprofit organization determined by the internal revenue
service to be tax exempt pursuant to section 501(c)(3) of the
"Internal Revenue Code of 1986," 26 U.S.C. 1, or a person that
funds such a nonprofit organization, if the nonprofit
organization represents the claimant on a pro bono basis.
Seeking or accepting a settlement or judgment that includes
costs or attorney's fees does not, in itself, make a nonprofit
organization or an attorney contracted by a nonprofit
organization a "commercial litigation financier."
(D)(1) "Commercial litigation financing agreement" means,
with respect to any civil action or group of civil actions, a
written agreement that meets all of the following:
(a) A third party agrees to provide funds to a named party
or a law firm that represents a named party in the civil action
or group of civil actions.
(b) The agreement creates a direct or collateralized
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interest in the proceeds of a civil action or group of civil
actions, by settlement, verdict, judgment, or otherwise.
(c) The interest created by the agreement is based, in
whole or part, on a funding obligation incurred in connection
with the action or group of actions, the appearing counsel, any
contractual co-counsel, or the law firm of the counsel or co-
counsel, executed with any of the following:
(i) Any attorney representing a party;
(ii) Any co-counsel in the civil action or group of
actions with a contingent fee interest in representing a named
party;
(iii) Any third-party who has a collateral-based interest
in the contingency fees of the counsel or co-counsel, or the law
firm of the counsel or co-counsel, related in whole or part to
the fees derived from representing that party.
(2) "Commercial litigation financing agreement" includes a
contract, such as an option, forward contract, futures contract,
short position, swap, or similar agreement, that is
substantially similar to an agreement described in division (D)
(1) of this section.
(3) "Commercial litigation financing agreement" does not
include any of the following:
(a) A consumer litigation funding agreement;
(b) An agreement by an attorney or law firm to provide
legal services on a contingency fee basis to the claimant or to
advance the claimant's legal costs in accordance with the rules
of professional conduct adopted by the supreme court;
(c) A health insurer, medical provider, or assignee that
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has paid, is obligated to pay, or is owed sums for a claimant's
health care under the terms of a health insurance plan or
agreement;
(d) A financial institution providing loans to the
claimant or the claimant's attorney or law firm, the repayment
of which is not contingent upon the outcome of the legal claim
or on the outcome of any matter within a portfolio that includes
the legal claim and involves the same attorney or law firm or
affiliated attorney or law firm;
(e) A person with a preexisting contractual obligation to
indemnify or defend a party to a legal claim.
(E) "Consumer" means a natural person or estate for a
decedent with a legal claim.
(F)(1) "Consumer litigation funding agreement" means a
nonrecourse agreement in which a consumer litigation funding
company purchases, and a consumer assigns to the company, a
contingent right to receive an amount of the potential proceeds
of any settlement, judgment, award, or verdict obtained in the
consumer's legal claim.
(2) "Consumer litigation funding agreement" does not
include any agreement involving a cash payment by the consumer
litigation funding company of four hundred thousand dollars or
more.
(G)(1) "Consumer litigation funding company" means a
person or entity that enters into a consumer litigation funding
agreement with a consumer.
(2) "Consumer litigation funding company" does not include
any of the following:
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(a) An immediate family member of the consumer;
(b) A bank, lender, financing entity, or other special
purpose entity that provides financing to a consumer litigation
funding company and to which a consumer litigation funding
company grants a security interest or transfers any rights or
interest in a consumer litigation funding;
(c) An attorney or accountant who provides services to a
consumer.
(H) "Funded amount" means the amount of money provided to,
or on behalf of, the consumer in a consumer litigation funding
agreement. "Funded amount" excludes charges.
(I) "Funding date" means the date on which the funded
amount is transferred to the consumer by the consumer litigation
funding company by personal delivery; via wire, automated
clearing house, or other electronic means; or by certified or
registered mail.
(J) "Immediate family member" means a spouse; sibling;
child, including adopted children and stepchildren; parent;
grandparent; or grandchild.
(K) "Legal claim" means a civil claim or cause of action.
(L) "Resolution date" means the date the funded amount,
plus the agreed upon charges, are delivered to the consumer
litigation funding company by the consumer, the consumer's
attorney, or otherwise.
Sec. 1357.011. The general assembly, in enacting sections
1357.01 to 1357.08 of the Revised Code pursuant to this act,
hereby declares its intent to adopt regulations concerning a
narrow range of consumer and commercial litigation financing
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agreements as contemplated in the holding of the Ohio Supreme
Court in Rancman v. Interim Settlement Funding Corp. , 99 Ohio
St.3d 121 (2003). The general assembly intends to preserve and
reinforce the general public policy expressed in that holding
against champerty and maintenance.
Sec. 1357.02. (A) A consumer litigation funding company
shall not enter into, or seek to enter into, a consumer
litigation funding agreement unless all of the following apply:
(1) The agreement is written in a clear and coherent
manner using common language that enables the average consumer
who makes a reasonable effort under ordinary circumstances to
read and understand the terms of the agreement without having to
obtain the assistance of an attorney or other professional.
(2) The agreement is completely filled-in when presented
to the consumer for signature.
(3) The agreement includes space on each page for the
consumer's initials.
(4) The front page of the agreement includes all of the
following disclosures under appropriate headings and in at least
twelve-point bold type:
(a) The funded amount to be paid to the consumer under the
agreement;
(b) An itemized list of all one-time and recurring charges
under the agreement, subject to section 1357.03 of the Revised
Code, and an explanation for how those charges accrue;
(c) The maximum amount that may be assigned by the
consumer to the company under the agreement, including the
funded amount and all charges, but excluding penalties that may
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apply in the case of a material breach, fraud, or
misrepresentation by or on behalf of the consumer;
(d) If the consumer seeks to enter into more than one
consumer litigation funding agreement with the same company, the
cumulative amount that may be assigned to the company under all
such agreements, including the funded amount and all charges,
but excluding penalties that may apply in the case of a material
breach, fraud, or misrepresentation by or on behalf of the
consumer.
(5) The agreement allows the consumer to cancel the
agreement, without penalty or further obligation, by returning
the full amount of disbursed funds to the company within ten
business days after the funding date. The consumer may do either
of the following to effectuate the cancellation:
(a) Deliver the company's uncashed check to the company's
offices in person, within ten business days after the
disbursement of funds;
(b) Mail a notice of cancellation and include in that
mailing a return of the full amount of disbursed funds in the
form of the company's uncashed check, or a registered or
certified check or money order, by insured, registered, or
certified United States mail, postmarked within ten business
days after receiving funds from the company, at the address
specified in the agreement for cancellation.
(6) The body of the agreement includes all of the
following statements in at least twelve-point boldface type:
(a) "CONSUMER'S RIGHT TO CANCELLATION: YOU MAY CANCEL THIS
AGREEMENT WITHOUT PENALTY OR FURTHER OBLIGATION WITHIN TEN
BUSINESS DAYS AFTER THE FUNDING DATE IF YOU RETURN THE FULL
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AMOUNT OF THE DISBURSED FUNDS TO [insert name of company]."
(b) "THE COMPANY HAS NO ROLE IN DECIDING WHETHER, WHEN,
AND HOW MUCH THE LEGAL CLAIM IS SETTLED FOR, HOWEVER, YOU OR
YOUR ATTORNEY MUST NOTIFY THE COMPANY OF THE OUTCOME OF THE
LEGAL CLAIM BY SETTLEMENT OR ADJUDICATION ON OR BEFORE THE
RESOLUTION DATE. THE COMPANY MAY SEEK UPDATED INFORMATION ABOUT
THE STATUS OF THE LEGAL CLAIM BUT IN NO EVENT SHALL THE COMPANY
ATTEMPT TO INTERFERE WITH, CONTROL, OR INFLUENCE THE INDEPENDENT
PROFESSIONAL JUDGMENT OF YOUR ATTORNEY IN THE HANDLING OF THE
LEGAL CLAIM OR ANY SETTLEMENT THEREOF."
(c) "THE FUNDED AMOUNT AND AGREED UPON CHARGES SHALL BE
PAID ONLY FROM THE PROCEEDS OF YOUR LEGAL CLAIM, AND SHALL BE
PAID ONLY TO THE EXTENT THAT THERE ARE AVAILABLE PROCEEDS FROM
YOUR LEGAL CLAIM. YOU WILL NOT OWE [insert name of company]
ANYTHING IF THERE ARE NO PROCEEDS FROM YOUR LEGAL CLAIM, UNLESS
YOU HAVE VIOLATED ANY MATERIAL TERM OF THIS AGREEMENT OR YOU
HAVE COMMITTED FRAUD AGAINST [insert name of company]."
(d) Immediately above the place on the agreement where the
consumer's signature is required: "DO NOT SIGN THIS AGREEMENT
BEFORE YOU READ IT COMPLETELY. DO NOT SIGN THIS AGREEMENT IF IT
CONTAINS ANY BLANK SPACES. YOU ARE ENTITLED TO A COMPLETELY
FILLED-IN COPY OF THIS AGREEMENT BEFORE YOU SIGN IT. BEFORE YOU
SIGN THIS AGREEMENT, YOU SHOULD OBTAIN THE ADVICE OF AN
ATTORNEY. DEPENDING ON THE CIRCUMSTANCES, YOU MAY WANT TO
CONSULT A TAX, PUBLIC OR PRIVATE BENEFIT PLANNING, OR FINANCIAL
PROFESSIONAL. YOU ACKNOWLEDGE THAT YOUR ATTORNEY IN THE LEGAL
CLAIM HAS PROVIDED NO TAX, PUBLIC OR PRIVATE BENEFIT PLANNING,
OR FINANCIAL ADVICE REGARDING THIS TRANSACTION. YOU FURTHER
ACKNOWLEDGE THAT YOUR ATTORNEY HAS EXPLAINED THE TERMS AND
CONDITIONS OF THIS AGREEMENT."
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(7) The agreement contains a written acknowledgement by
the attorney retained by the consumer in the legal claim that
attests to all of the following:
(a) The attorney has reviewed the agreement and all
disclosures required by this section with the consumer.
(b) The attorney is being paid on a contingency basis
pursuant to a written fee agreement.
(c) All proceeds of the legal claim will be disbursed via
the trust account of the attorney or a settlement fund
established to receive the proceeds of the legal claim on behalf
of the consumer.
(d) The attorney agrees to disburse funds from the legal
claim and take any other steps necessary to ensure that the
terms of the consumer litigation funding agreement are
fulfilled.
(e) The attorney has not received a referral fee or other
consideration from the consumer litigation funding company in
connection with the consumer litigation funding, nor will the
attorney receive such a fee or other consideration in the
future.
(f) The attorney has provided no tax, public or private
benefit planning, or financial advice regarding this
transaction.
(B)(1) A violation of this section or section 1357.03 of
the Revised Code by a consumer litigation funding company
constitutes an unfair or deceptive act or practice in violation
of section 1345.02 of the Revised Code.
(2) A consumer injured by such a violation has a cause of
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action and is entitled to the same relief available to a
consumer under section 1345.09 of the Revised Code.
(3) All powers and remedies available to the attorney
general to enforce sections 1345.01 to 1345.13 of the Revised
Code are available to the attorney general to enforce this
section.
(C) In addition to remedies set forth in division (B) of
this section, any violation of this section, including omission
of the attorney acknowledgement required by division (A)(7) of
this section, renders the consumer litigation funding agreement
unenforceable by the company, the consumer, or any successor in
interest to the agreement. A consumer terminating the attorney
who made the acknowledgment required by division (A)(7) of this
section or retaining a new attorney with respect to the legal
claim does not, in itself, render the agreement unenforceable
under this division.
Sec. 1357.03. A consumer litigation funding company shall
not do any of the following:
(A) Pay or offer to pay a commission, referral fee, or
other form of consideration to any attorney, law firm, health
care provider, chiropractor, or physical therapist, or to any
employee or agent of the foregoing, for referring a consumer to
the company;
(B) Accept any commission, referral fee, rebate, or other
form of consideration from an attorney, law firm, health care
provider, chiropractor, or physical therapist, or from any
employee or agent of the foregoing;
(C) Purposefully advertise false or misleading information
regarding the company's products or services;
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(D) Refer a consumer or potential consumer to a specific
attorney, law firm, medical provider, chiropractor, or physical
therapist, or to any employee or agent of the foregoing, except
that, if a consumer does not have legal representation, the
company may refer the consumer to a state or local lawyer
referral service operated by a bar association or nonprofit
organization, or a legal aid society, as defined in section
120.51 of the Revised Code;
(E) Fail to promptly supply copies of all complete
consumer litigation funding agreements to the consumer and the
attorney representing the consumer in the legal claim;
(F) Knowingly enter into a consumer litigation funding
agreement with a consumer for a legal claim respecting which the
consumer previously sold or assigned all or part of the
consumer's right to the proceeds, unless the company or the
consumer extinguishes the prior agreement by either repaying the
entire disbursed amount plus any contracted fees, or paying a
lesser amount expressly agreed to, in writing, by the consumer
and all other parties to the prior agreement. More than one
company may agree, contemporaneously, to enter into a consumer
litigation funding agreement with the same consumer for the same
claim so long as the companies, the consumer, and the consumer's
attorney consent to the agreements in writing.
(G) Make or influence any decision with respect to the
conduct of the consumer's legal claim or the settlement or
resolution of that legal claim, including appointing or changing
counsel, choice or use of expert witnesses, litigation strategy,
and settlement or other resolution of the claim;
(H) Attempt to obtain a waiver of any remedy, including
compensatory, statutory, or punitive damages, to which the
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consumer might otherwise be entitled;
(I) Knowingly pay or offer to pay for court costs, filing
fees, or attorney's fees before, during, or after the resolution
of the legal claim;
(J)(1) Charge or collect from a consumer either of the
following in connection with a consumer litigation funding
agreement:
(a) A prepayment penalty or fee;
(b) Charges in excess of ten per cent of the funded amount
per year.
(2) Charges in excess of the amount specified in division
(J)(1)(b) of this section and prepayment penalties prohibited by
division (J)(1)(a) of this section are unenforceable.
(K) Enter into a consumer litigation finance agreement if
an attorney or a law firm retained by the consumer for the legal
claim on which the agreement is based has a financial or
ownership interest in the company.
Sec. 1357.04. (A) An attorney retained by a consumer in a
legal claim shall not disclose confidential or privileged
information to a consumer litigation funding company without
first obtaining written consent from the consumer and without
first ensuring that the disclosure is not prohibited by court
rules, a court order, or the rules of professional conduct
adopted by the supreme court.
(B)(1) Within thirty days after receiving a written
request from any party to the legal claim or an insurer that has
a duty to defend any party to the legal claim, the consumer
shall disclose to that party or insurer whether the consumer has
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entered into a consumer litigation funding agreement.
(2) If a consumer enters into a consumer litigation
funding agreement pertaining to the action in question after
responding to a request under division (B)(1) of this section in
the negative, the consumer shall disclose that fact to the
requesting party or insurer within thirty days after the
consumer enters into the agreement.
(C) Consumer litigation funding agreements, and all
parties to such agreements, are presumed to be subject to
discovery in any civil proceeding, notwithstanding any contrary
provision of the agreement.
(D) Consumer litigation funding agreements disclosed under
divisions (A) and (B) of this section and consumer litigation
funding agreements discovered pursuant to division (C) of this
section are presumed to be inadmissible as evidence in a civil
proceeding.
(E) Communications between a consumer's attorney and a
consumer litigation funding company to allow the company to
ascertain the status or expected value of a legal claim are not
subject to discovery in any civil proceeding.
Sec. 1357.05. A consumer litigation funding agreement
places a lien on the proceeds of the consumer's legal claim that
supersedes all subsequently perfected liens on such proceeds
other than liens directly related to the legal claim and
expressly authorized by state or federal law, such as a lien for
attorneys fees, a lien by the department of medicaid under
section 5160.37 of the Revised Code, a medicare lien under 42
U.S.C. 1395y, or a workers' compensation lien under section
4123.931 of the Revised Code.
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Sec. 1357.06. (A) No consumer litigation funding company
shall enter into a consumer litigation financing agreement with
a person or entity that is not domiciled in the United States or
respecting a legal claim that is financed, directly or
indirectly, by a person or entity not domiciled in the United
States.
(B) No commercial litigation financier shall enter into a
commercial litigation financing agreement with a person or
entity that is not domiciled in the United States or respecting
a legal claim that is financed, directly or indirectly, by a
person or entity not domiciled in the United States.
(C) The general assembly declares its intent in enacting
this section is to achieve the legitimate state interest of
protecting due process rights for all litigants in the courts of
this state by addressing the grave risk posed by foreign actors
that seek to interfere with those courts by supporting meritless
cases, overwhelming dockets, and profiting from litigation.
Sec. 1357.07. (A) No claimant, attorney or law firm
representing a claimant, or affiliated attorney or law firm
shall disclose or share any documents or information with a
commercial litigation financier that are subject to a protective
or sealing order from a court.
(B) A commercial litigation financier shall not make any
decision, have any influence, or direct any decisions with
respect to the course of a legal claim, including decisions in
appointing or changing counsel, choice or use of expert
witnesses, litigation strategy, and settlement or other
resolution.
(C) A claimant or the claimant's attorney shall, without
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awaiting a discovery request, provide any commercial litigation
financing agreement at the time a legal claim is asserted or
commenced and any time thereafter that a commercial litigation
financing agreement is executed or amended, to both of the
following:
(1) All named parties to the legal claim;
(2) All insurers that have or may have a potential duty to
defend or indemnify a named party to the legal claim.
Sec. 1357.08. The attorney general may file a complaint
seeking any equitable remedy, including barring a commercial
litigation financier from doing business in Ohio, if the
commercial litigation financier is found by a court of competent
jurisdiction to have violated this chapter.
Section 2. That section 1349.55 of the Revised Code is
hereby repealed.
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