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H 1182

An Act relative to litigation financing

194th Legislature (2025-2026) Introduced by Danielle Gregoire

Massachusetts establishes consumer protections and regulatory oversight for third-party litigation financing arrangements to balance access to justice against predatory lending practices.

Hearing rescheduled to 10/07/2025 from 10:30 AM-01:10 PM in A-2 and Virtual Hearing updated to New End Time
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Bill Summary · H 1182

Legislative bill overview

H.1182 addresses litigation financing, a practice where third parties provide funds to plaintiffs in exchange for a percentage of settlement or judgment proceeds. The bill establishes regulatory frameworks and consumer protections for these financial arrangements, which have grown significantly in recent years.

Why is this important

Litigation financing can enable access to justice for people who cannot afford lengthy legal proceedings, but it can also create perverse incentives, encourage frivolous claims, and impose high costs on plaintiffs. How Massachusetts regulates this industry affects consumer protections, court efficiency, and the economics of civil litigation statewide.

Potential points of contention

  • Funding costs and affordability: Litigation finance companies typically charge 30-50% interest rates or higher, raising questions about whether protections for borrowers are adequate or if caps on rates are needed
  • Disclosure and transparency: Disputes may arise over what information must be disclosed to courts, opposing parties, and other creditors, and how this affects settlement negotiations
  • Debt collection and settlement dynamics: Lenders' interests may conflict with plaintiffs' interests in accepting reasonable settlements, potentially prolonging litigation or creating conflicts with attorneys' duties

Compiled from official sources — confirm details with the bill’s official record.

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