A bill for an act regulating litigation financing contracts, and including effective date and applicability provisions.

2025-2026 Regular Session Introduced by Bill Gustoff

HF 210 mandates disclosure of litigation financing contracts to all parties in legal actions, enhancing transparency and protecting consumers from conflicts of interest.

Tabled until future meeting.

#administrativeprocedure #businessentities #civilprocedure #classactions #consumeraffairs #contracts #litigation #nonprofitentities #secretaryofstate #tortlaw

Bill Information

Bill Number: HF 210

Title: A bill for an act regulating litigation financing contracts, and including effective date and applicability provisions.

Status: Tabled until future meeting.

Introduced: February 06, 2025

Classification: Bill

Subject Areas: Administrative Procedure, Business Entities, Civil Procedure, Class Actions, Consumer Affairs, Contracts, Litigation, Nonprofit Entities, Secretary of State, Tort Law

Purpose and Intent

The primary purpose of HF 210 is to establish regulations surrounding litigation financing contracts. These contracts are agreements where a third party provides funding to a litigant in exchange for a portion of any potential settlement or judgment. The bill aims to enhance transparency in litigation financing by imposing disclosure requirements on consumers and their legal representatives.

Key Provisions

HF 210 includes several significant provisions:

Disclosure Requirements:

Consumers or their legal representatives must disclose and deliver the litigation financing contract to:
- All parties involved in the civil action or administrative proceeding.
- The court, agency, or tribunal where the action is pending.
- Any known individuals or entities with a preexisting obligation to indemnify or defend a party in the action.
This disclosure obligation applies regardless of whether a civil action or administrative proceeding has commenced.

Continuing Obligation:

The obligation to disclose is ongoing. Consumers must disclose any new or amended litigation financing contracts within 30 days of entering into or modifying such contracts.

Discovery Provisions:

The existence of litigation financing contracts and all parties involved are subject to discovery in any related civil action or administrative proceeding.

Exemptions:

The regulations do not apply to nonprofit organizations that provide litigation financing for the benefit of their members without receiving compensation.

Impact

The bill is designed to protect consumers by ensuring that all parties involved in litigation are aware of any financing arrangements that may affect the outcome of the case. By mandating transparency, HF 210 seeks to prevent potential conflicts of interest and ensure that all relevant information is available during legal proceedings.

Affected Parties

Consumers: Individuals seeking litigation financing will be required to disclose their contracts.

Legal Representatives: Attorneys will need to ensure compliance with the disclosure requirements.

Litigants: All parties involved in civil actions or administrative proceedings will be informed of any financing arrangements.

Nonprofit Organizations: Exempt from these regulations if they provide financing for their members.

Procedural Aspects

The bill was introduced on February 06, 2025, and referred to the Judiciary Committee.

A subcommittee meeting was held on February 11, 2025, and subsequently reassigned on February 17, 2025.

The bill was tabled on February 25, 2025, pending further discussion in future meetings.

HF 210 represents a significant step towards regulating litigation financing, aiming to create a more transparent legal environment for all parties involved.

Bill