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SB 985

SB 985 - This act modifies various provisions relating to the Secretary of State. TECHNOLOGY TRUST FUND (Various Sections) Several provisions in current law allow the Secretary of State (SOS) to collect an additional $5 fee on fees for filings relating to business organizations, commercial transactions, and trademarks, names, and private emblems to be credited to the state's technology trust fund. These provisions are set to expire on December 31, 2026. This act extends the expiration date to December 31, 2030. This act is identical to the perfected HB 770 (2025) and similar to provisions in HCS/HB 2125 (2026), HCS/SS#2/SCS/SB 10 (2025), and SB 570 (2025). PRECINCT CODES (Sections 115.008 and 115.283) The act requires the Secretary of State (SOS) to establish a unique identification coding system for all precincts in the state resulting in unique identification codes for each precinct in the state. Such system shall be based upon the Federal Information Processing Standards codes issued by the National Institute of Standards and Technology. Election authorities shall be responsible for implementing the unique identification coding system for all precincts within its jurisdiction in compliance with the format set out by the SOS. Additionally, all statements that are attached to an absentee ballot envelope shall contain the precinct code that corresponds to the voter's voting address. This provision is identical to a provision in SB 362 (2025). VOTER REGISTRATION LIST PUBLISHED (Section 115.157) The act requires the SOS to publish a voter registration list on the Secretary's website containing only the following information for each person registered to vote as of the 4th Wednesday prior to the election: unique voter identification numbers, voters' names, year of birth, addresses, townships or wards, and precincts. Such list shall be published not later than the 3rd Wednesday prior to the election. This provision is identical to a provision in SB 362 (2025). DELIVERY OF VOTE ABSTRACTS TO SECRETARY OF STATE (Section 115.507) Current law requires verification boards to deliver to the Secretary of State the abstract of votes given in its jurisdiction by polling place or precinct for each primary and general election. This act requires the abstract to include both regular votes and absentee votes aggregated together and additionally requires reporting to be based solely by precinct. This provision is identical to a provision in SB 362 (2025). SCOTT SVAGERA

2026 Regular Session Introduced by Jill Carter

Maryland law to regulate third-party litigation financing by requiring disclosures, fiduciary duties, and penalties to protect consumers.

Hearing Conducted S Local Government, Elections and Pensions Committee
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WeVote Research Nonpartisan
Bill Summary · SB 985

Summary — SB 985: Consumer Protection — Third‑Party Litigation Financing

Status: Enacted (signed by Governor 5/24/2025); Effective 9/1/2025
Introduced: 1/29/2025 • Sponsor: Sen. A. Washington (primary listed: DECOITE)
Related/Companion: HB 342; SB 1597

Purpose

SB 985 (Maryland Transparency in Third‑Party Litigation Financing Act) creates a regulatory and disclosure framework for third‑party litigation financing (TPLF) transactions to promote consumer protection and transparency, and to address perceived unfair or opaque contract terms and practices.

Key provisions

  • Definitions

    • Establishes key terms including “litigation financier,” “litigation financing,” “litigation financing contract,” “consumer,” “legal representative,” and “portfolio of actions.”
    • Explicitly excludes contingency‑fee arrangements between a consumer and the consumer’s legal representative from the definition of a litigation financing contract.

  • Applicability / Exemptions

    • Act does not apply to: certain nonprofit financings (so long as no fees/interest or recovery rights are taken, except in‑house counsel), commerce/business actors who do not charge fees or take an interest in outcomes, or banking institutions that do not take recovery rights.

  • Contract form and mandatory disclosures

    • Litigation financing contracts must be in writing and include all intended terms; financiers may not amend executed contracts without full disclosure and prior written consent of each party.
    • Required disclosures must be “material terms,” conspicuously presented (typed in at least 14‑point bold font).
    • Mandatory items include (among others):
    • Financier name, street and mailing address on first page;
    • Statement that some or all financing may be taxable;
    • Description of consumer’s right of rescission;
    • Itemization of charges;
    • Total funded amount and total amount due (presented in 6‑month intervals over a 42‑month period, including all charges and fees);
    • Cumulative amount due where consumer has sought multiple financings;
    • Statement that if there is no recovery, the consumer owes nothing; and that consumer cannot owe more than recovery where recovery is insufficient to satisfy the financier’s assigned amount.

  • Disclosure in civil actions

    • Parties must, without awaiting discovery, provide other parties and any insurer with a duty to defend any litigation financing contract under which the financier has a contingent right to compensation.
    • Disclosure is a continuing obligation and applies whether or not the civil action has formally commenced.
    • Admissibility governed by Maryland Rules of Evidence; the statute’s disclosure requirement alone does not make a contract admissible.

  • Fiduciary duty and remedies

    • Imposes a fiduciary duty on litigation financiers in certain class actions (text indicates fiduciary duties in specified class action contexts).
    • A violation by a litigation financier renders the litigation financing contract void and unenforceable by the financier and any successor in interest.
    • Office of the Attorney General (OAG) is authorized to enforce the Act; statute also contemplates penalties and potential usury remedies where applicable.
    • Contains severability clause and a prospective‑only application (does not apply to contracts entered before the effective date).

Who is affected

  • Consumers (plaintiffs, claimants) who obtain third‑party litigation financing in Maryland.
  • Litigation financiers and investors providing TPLF.
  • Plaintiffs’ attorneys and law firms insofar as financing arrangements intersect with representation (contingency fee arrangements are excluded from the statute’s financing‑contract definition).
  • Insurers, opposing parties, and courts (due to disclosure obligations).

Fiscal and operational impact

  • Fiscal note: No material effect on State finances. OAG can likely enforce the Act with existing resources assuming a small number of complaints.
  • Small businesses (financiers and resellers of financing) may be meaningfully affected by new compliance requirements and disclosure obligations.

Procedural/timeline notes

  • Enacted: Passed both chambers (record votes and amendments noted) and signed 5/24/2025.
  • Effective date: 9/1/2025.
  • The law applies prospectively only to contracts entered on or after the effective date.

For full statutory language and exact disclosure formatting and content requirements, consult the enacted text in Article — Commercial Law, Subtitle 50 (Maryland Transparency in Third‑Party Litigation Financing Act).

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

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