Texas 2017 - 85th Regular

Texas House Bill HB584 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	85R2113 GRM-F
2	2	By: Hernandez H.B. No. 584
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to litigation financing transactions.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Subtitle B, Title 4, Finance Code, is amended by
10	10	adding Chapter 354 to read as follows:
11	11	CHAPTER 354. LITIGATION FINANCING AGREEMENTS
12	12	SUBCHAPTER A. GENERAL PROVISIONS
13	13	Sec. 354.001. DEFINITIONS. In this chapter:
14	14	(1) "Charge" or "charges" means the amount paid to a
15	15	litigation financing company by or on behalf of the consumer that is
16	16	in addition to the funded amount provided by or on behalf of the
17	17	company to a consumer.
18	18	(2) "Consumer" means an individual who has a pending
19	19	legal claim and who:
20	20	(A) resides in this state; or
21	21	(B) has the legal claim in this state.
22	22	(3) "Funded amount" means the amount provided to or on
23	23	behalf of the consumer under a litigation financing agreement. The
24	24	term does not include a charge.
25	25	(4) "Funding date" means the date on which the
26	26	litigation financing company transfers or otherwise delivers the
27	27	funded amount to the consumer.
28	28	(5) "Immediate family member" means:
29	29	(A) a parent, sibling, spouse, grandparent, or
30	30	grandchild of an individual; or
31	31	(B) a child related by blood, adoption, or
32	32	marriage to an individual.
33	33	(6) "Legal claim" includes:
34	34	(A) a civil action;
35	35	(B) an alternative dispute resolution
36	36	proceeding; or
37	37	(C) an administrative proceeding before an
38	38	agency of this state.
39	39	(7) "Litigation financing agreement" means an
40	40	agreement under which:
41	41	(A) money is provided to or on behalf of a
42	42	consumer by a litigation financing company for a purpose other than
43	43	prosecuting the consumer's legal claim; and
44	44	(B) the repayment of the money is in accordance
45	45	with a litigation financing transaction the terms of which are
46	46	included as part of the litigation financing agreement.
47	47	(8) "Litigation financing company" or "company" means
48	48	a person that enters into a litigation financing agreement with a
49	49	consumer.
50	50	(9) "Litigation financing transaction" means a
51	51	non-recourse transaction in which a litigation financing company
52	52	purchases, and a consumer assigns to the company, a contingent
53	53	right to receive an amount of the potential proceeds of a
54	54	settlement, judgment, award, or verdict obtained in the consumer's
55	55	legal claim.
56	56	Sec. 354.002. NONAPPLICABILITY OF CHAPTER. Except as
57	57	specifically provided by this chapter, this chapter does not apply
58	58	to the following persons who enter into a litigation financing
59	59	agreement with a consumer:
60	60	(1) an immediate family member of the consumer;
61	61	(2) an accountant who provides accounting services to
62	62	the consumer; or
63	63	(3) an attorney who, at the time money is provided to
64	64	or on behalf of a consumer under a litigation financing agreement,
65	65	has an attorney-client relationship with the consumer concerning
66	66	the consumer's legal claim.
67	67	SUBCHAPTER B. AGREEMENT REQUIREMENTS
68	68	Sec. 354.051. FORM OF AGREEMENT. A litigation financing
69	69	agreement must:
70	70	(1) be in writing;
71	71	(2) contain the initials of the consumer on each page;
72	72	and
73	73	(3) be otherwise complete when presented to the
74	74	consumer for signature.
75	75	Sec. 354.052. DISCLOSURES. On the front page of the
76	76	agreement under appropriate headings, the agreement must disclose:
77	77	(1) the funded amount to be paid to the consumer by the
78	78	litigation financing company;
79	79	(2) an itemization of one-time charges;
80	80	(3) the total amount to be assigned by the consumer to
81	81	the company, including the funded amount and all charges; and
82	82	(4) a payment schedule that:
83	83	(A) includes the funded amount and charges; and
84	84	(B) lists all dates and the amount due at the end
85	85	of each 180-day period from the funding date until the due date of
86	86	the maximum amount due to the company by the consumer to satisfy the
87	87	amount owed under the agreement.
88	88	SECTION 2. The changes in law made by this Act apply only to
89	89	a litigation financing agreement entered into on or after the
90	90	effective date of this Act. A litigation financing agreement
91	91	entered into before the effective date of this Act is governed by
92	92	the law in effect on the date the agreement was entered into, and
93	93	the former law is continued in effect for that purpose.
94	94	SECTION 3. This Act takes effect September 1, 2017.