83R9173 AJA-F
By: Miller of Comal H.B. No. 1855
A BILL TO BE ENTITLED
AN ACT
relating to mandatory disclosure of third-party litigation
financing agreements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter A, Chapter 22, Government Code, is
amended by adding Section 22.018 to read as follows:
Sec. 22.018. DISCLOSURE OF THIRD-PARTY LITIGATION
FINANCING. (a) In this section:
(1) "Financing" means the provision of monetary or
in-kind support for a party's filing and prosecution of a civil
action, including the payment of an attorney to represent the
party, the payment of any fees for any witnesses for the party, the
payment of any fees for any experts for the party, or the payment of
any costs of the civil action.
(2) "Third-party litigation financing" means the
provision of financing to a person or group of persons that is or
may become a party to a civil action, or an attorney for the person
or group, with repayment of the financing being conditioned on and
sourced from the person's proceeds from the civil action by
judgment, settlement, or otherwise. The term does not include:
(A) any extension of credit from any person to
any attorney licensed by the supreme court to practice law where the
obligation of the attorney to repay all or part of the extension of
credit, including any interest on the extended credit, is not
contingent on the outcome of a specified civil action or portfolio
of civil actions in which the attorney is representing a person
other than the attorney, whether or not the credit agreement
provides the creditor a security interest in any proceeds of any
civil action in which the attorney is representing a person other
than the attorney; or
(B) any contingent fee arrangement entered into
by an attorney licensed by the supreme court to practice law.
(b) The supreme court shall adopt rules to provide for the
mandatory disclosure of third-party litigation financing
agreements to parties in a civil action in connection with which
third-party litigation financing is provided.
SECTION 2. The Supreme Court of Texas shall adopt rules
under Section 22.018, Government Code, as added by this Act, not
later than December 31, 2013. The rules apply only to a civil
action commenced on or after the effective date of the rules.
SECTION 3. This Act takes effect September 1, 2013.