Bill Text: TX HB584 | 2017-2018 | 85th Legislature | Introduced
Bill Title: Relating to litigation financing transactions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-02-20 - Referred to Judiciary & Civil Jurisprudence [HB584 Detail]
Download: Texas-2017-HB584-Introduced.html
85R2113 GRM-F | ||
By: Hernandez | H.B. No. 584 |
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relating to litigation financing transactions. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Subtitle B, Title 4, Finance Code, is amended by | ||
adding Chapter 354 to read as follows: | ||
CHAPTER 354. LITIGATION FINANCING AGREEMENTS | ||
SUBCHAPTER A. GENERAL PROVISIONS | ||
Sec. 354.001. DEFINITIONS. In this chapter: | ||
(1) "Charge" or "charges" means the amount paid to a | ||
litigation financing company by or on behalf of the consumer that is | ||
in addition to the funded amount provided by or on behalf of the | ||
company to a consumer. | ||
(2) "Consumer" means an individual who has a pending | ||
legal claim and who: | ||
(A) resides in this state; or | ||
(B) has the legal claim in this state. | ||
(3) "Funded amount" means the amount provided to or on | ||
behalf of the consumer under a litigation financing agreement. The | ||
term does not include a charge. | ||
(4) "Funding date" means the date on which the | ||
litigation financing company transfers or otherwise delivers the | ||
funded amount to the consumer. | ||
(5) "Immediate family member" means: | ||
(A) a parent, sibling, spouse, grandparent, or | ||
grandchild of an individual; or | ||
(B) a child related by blood, adoption, or | ||
marriage to an individual. | ||
(6) "Legal claim" includes: | ||
(A) a civil action; | ||
(B) an alternative dispute resolution | ||
proceeding; or | ||
(C) an administrative proceeding before an | ||
agency of this state. | ||
(7) "Litigation financing agreement" means an | ||
agreement under which: | ||
(A) money is provided to or on behalf of a | ||
consumer by a litigation financing company for a purpose other than | ||
prosecuting the consumer's legal claim; and | ||
(B) the repayment of the money is in accordance | ||
with a litigation financing transaction the terms of which are | ||
included as part of the litigation financing agreement. | ||
(8) "Litigation financing company" or "company" means | ||
a person that enters into a litigation financing agreement with a | ||
consumer. | ||
(9) "Litigation financing transaction" means a | ||
non-recourse transaction in which a litigation financing company | ||
purchases, and a consumer assigns to the company, a contingent | ||
right to receive an amount of the potential proceeds of a | ||
settlement, judgment, award, or verdict obtained in the consumer's | ||
legal claim. | ||
Sec. 354.002. NONAPPLICABILITY OF CHAPTER. Except as | ||
specifically provided by this chapter, this chapter does not apply | ||
to the following persons who enter into a litigation financing | ||
agreement with a consumer: | ||
(1) an immediate family member of the consumer; | ||
(2) an accountant who provides accounting services to | ||
the consumer; or | ||
(3) an attorney who, at the time money is provided to | ||
or on behalf of a consumer under a litigation financing agreement, | ||
has an attorney-client relationship with the consumer concerning | ||
the consumer's legal claim. | ||
SUBCHAPTER B. AGREEMENT REQUIREMENTS | ||
Sec. 354.051. FORM OF AGREEMENT. A litigation financing | ||
agreement must: | ||
(1) be in writing; | ||
(2) contain the initials of the consumer on each page; | ||
and | ||
(3) be otherwise complete when presented to the | ||
consumer for signature. | ||
Sec. 354.052. DISCLOSURES. On the front page of the | ||
agreement under appropriate headings, the agreement must disclose: | ||
(1) the funded amount to be paid to the consumer by the | ||
litigation financing company; | ||
(2) an itemization of one-time charges; | ||
(3) the total amount to be assigned by the consumer to | ||
the company, including the funded amount and all charges; and | ||
(4) a payment schedule that: | ||
(A) includes the funded amount and charges; and | ||
(B) lists all dates and the amount due at the end | ||
of each 180-day period from the funding date until the due date of | ||
the maximum amount due to the company by the consumer to satisfy the | ||
amount owed under the agreement. | ||
SECTION 2. The changes in law made by this Act apply only to | ||
a litigation financing agreement entered into on or after the | ||
effective date of this Act. A litigation financing agreement | ||
entered into before the effective date of this Act is governed by | ||
the law in effect on the date the agreement was entered into, and | ||
the former law is continued in effect for that purpose. | ||
SECTION 3. This Act takes effect September 1, 2017. |