SCS/SB 360 - This act establishes the Civil Litigation Funding Act. This act requires that all civil litigation funding contracts meet certain requirements, including that the contract be completely filled in when presented to the consumer, that it contain a right of rescission, that it contain the initials of the consumer on each page, and that it requires that the consumer to give direction to his or her attorney to notify the civil litigation funding company when the legal claim has been resolved. The civil litigation funding company shall also notify the consumer's attorney of the consumer litigation funding contract. This act also bans civil litigation funding companies from performing certain actions as set forth in this act.
Under this act, a civil litigation funding company shall require the contracted amount paid to the funding company to be based upon intervals of time from the funding date through the resolution date, and not determined as a percentage of the recovery from the legal claim. Additionally, the aggregate of the original loan and any charges a civil litigation lending imposes shall not be greater than 33% of the settlement or resolution of the underlying legal claim, and no contract shall be valid if written for a period greater than 36 months. Further, all civil litigation funding contracts shall contain certain disclosures as set forth in this act. This act also contains provisions banning attorneys from engaging in certain practices.
Under this act, all civil litigation funding companies are required to register with the Department of Insurance, Financial Institutions, and Professional Registration. Such registration shall contain information required by the Department to make an evaluation of the character and fitness of the company, and shall be accompanied by a $500 fee. Such registration be renewed every 2 years for a fee of $200. Along with filing an application with the Department, the company may also be required to provide a bond of $50,000 or an irrevocable letter of credit. Under certain conditions as set forth in this act, the civil litigation funding company may be entitled to a hearing.
This act is substantially similar to HB 512 (2015), and is similar to HB 26 (2015), SB 542 (2014), HB 1569 (2014), and SB 440 (2013).