SS/SCS/SB 785 - 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, a civil litigation funding company shall not impose any charge greater than 21% of the funded amount annually, and no contract shall assess interest or additional charges after 30 months. Under this act, only attorney's liens related to the consumer's legal claim, Medicare, or other statutory liens to take priority over claims from the civil litigation funding company. Further, all civil litigation funding contracts shall contain certain disclosures as set forth in this act.
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 1705 (2016), HB 512 (2015) and SB 360 (2015), and is similar to SB 882 (2016), HB 1706 (2016), SB 542 (2014), HB 1569 (2014), and SB 440 (2013).
SA 1 - THIS ACT PROHIBITS CIVIL LITIGATION FUNDING COMPANIES FROM CHARGING MORE THAN 21% OF THE FUNDED AMOUNT ANNUALLY. THIS AMENDMENT REMOVES THIS PROVISION AND INSTEAD PROHIBITS CIVIL LITIGATION FUNDING COMPANIES FROM CHARGING INTEREST OR OTHER CHARGES THAT ARE GREATER THAN THOSE ALLOWED UNDER CERTAIN PROVISIONS OF LAW.
SSA 1 - THIS ACT PROHIBITS THE CHARGES IMPOSED BY A CIVIL LITIGATION FUNDING COMPANY FROM EXCEEDING 21% OF THE FUNDED AMOUNT ANNUALLY. THIS AMENDMENT CHANGES THE AMOUNT OF CHARGES THAT MAY NOT BE EXCEED TO 29% OF THE FUNDED AMOUNT ANNUALLY.
THIS ACT PROHIBITS CIVIL LITIGATION FUNDING CONTRACTS FROM ASSESSING ANY ADDITIONAL CHARGES OR INTEREST TO THE CONSUMER AFTER 30 MONTHS FROM THE FUNDING DATE. THIS AMENDMENT CHANGES THIS LIMITATION TO 36 MONTHS.
SA 1 TO SSA 1 - THIS ACT PROHIBITS THE CHARGES IMPOSED BY A CIVIL LITIGATION FUNDING COMPANY FROM EXCEEDING 21% OF THE FUNDED AMOUNT ANNUALLY. THIS AMENDMENT INSTEAD PROHIBITS CHARGES AND INTEREST FROM EXCEEDING THE AMOUNT OF INTEREST THAT MAY BE CHARGED FOR UNSECURED LOANS OF $500 OR LESS.