LB199 Summary (Nebraska, 109th Legislature, 2025)
Overview
- Purpose: LB199 would (a) shorten the statute of limitations for personal injury actions from four years to two years for causes accruing on or after the act’s effective date, and (b) create a regulatory framework for nonrecourse civil litigation funding (NCLF) and require disclosures by consumers in such arrangements. It also provides for discipline of civil litigation funding companies and makes related conforming changes.
- Status: Notice of hearing for February 5, 2025. Introduced January 14, 2025. Referred to the Judiciary Committee (Sponsor: Senator Tony Sorrentino; Chair: Senator Carolyn Bosn). Affected sections would be repealed and reissued under the act.
Key Provisions
1) Statute of Limitations for Personal Injury (Sec. 1)
- Action for personal injury must be brought within two years.
- Applies only to causes of action accruing on or after the act’s effective date.
2) Nonrecourse Civil Litigation Act (Sec. 2-3)
- Establishes a new framework titled the Nonrecourse Civil Litigation Act.
- Definitions (Sec. 2):
- Civil litigation funding company: entity that enters into an NCLF transaction with a consumer.
- Consumer: Nebraska resident or domiciliary who enters an NCLF transaction and has a pending legal claim, represented by counsel.
- Legal claim: civil claim or action, or claim in an administrative proceeding.
- Nonrecourse civil litigation funding: a transaction where the funding company purchases the consumer’s contingent right to proceeds from a claim, payable from realized settlement/judgment/award/verdict.
- Scope: Applies to both civil actions and administrative proceedings.
3) Disclosure Requirements (Sec. 4)
- Mandatory, ongoing disclosure of any NCLF contract to:
- The consumer’s claim party/attorney, the court or tribunal, and any insurer or known indemnifier.
- Occurrence regardless of whether a civil action or administrative proceeding has commenced.
- Ongoing obligation: within 30 days of entering into a new contract or amending an existing contract, disclose and deliver the new/amended contract.
- Disclosure of funding contract terms is subject to discovery in the related claim.
- Disclosure of contract existence and participants is discoverable.
4) Registration, Oversight, and Discipline (Sec. 5)
- Secretary of State to issue a certificate of registration to compliant NCLF providers; registration can be denied, suspended, revoked, or not renewed for specified conduct or violations.
- Due process: proper notice and an opportunity for a hearing; Administrative Procedure Act applies.
- Temporary certificate may be issued during pending applications.
- Annual reporting: registered NCLF providers must submit data on volume, amounts, repayment obligations, fees charged (including APR and itemized fees), and cases where realizations were less than contracted.
- Legislature received an annual aggregate report on NCLF activity.
5) General Provisions (Sec. 6-7)
- Reviser of Statutes to assign Sec. 1 to Chapter 25, Article 2.
- Original sections 25-3301, 25-3302, and 25-3309 repealed and reenacted as part of the act.
Impact and Stakeholders
- Personal injury plaintiffs: potential shift to a shorter two-year filing window could affect case strategies and eligibility timelines for claims accruing after the act’s effective date.
- Consumers and attorneys engaging in NCLF: mandatory disclosures could change funding arrangements and transparency, with enhanced visibility to litigants, courts, and insurers.
- Civil litigation funding companies: new licensing, disclosure, reporting requirements, and possible disciplinary actions by the Secretary of State.
- Courts and administrative agencies: enhanced discovery and handling of NCLF contracts.
Timeline and Procedural Notes
- Introduced January 14, 2025; referred to Judiciary.
- Notice of hearing published January 28, 2025; hearing scheduled for February 5, 2025.
- The act would repeal and reissue specific statutes to incorporate the Nonrecourse Civil Litigation Act.
