HB 1293 - Litigation Financing Consumer Protection Act

• Creates Part VIII of Chapter 501 establishing the "Litigation Financing Consumer Protection Act" with registration requirements, disclosure standards, and conduct prohibitions for litigation financiers

• Requires litigation financiers to register with the Department of State and file a $250,000 surety bond before engaging in litigation financing; allows department to revoke registrations for noncompliance

• Limits interest to maximum 10% per annum on funded amount calculated using simple interest; caps total fees and charges at $500 per civil action or claim regardless of contract count; interest accrues only until final court order or settlement, maximum 3 years

• Mandates written contracts with specified disclosures in boldfaced type including funded amount, itemized fees, interest rate, cancellation rights, and notices that consumer owes nothing if case is lost and financier accepts reduced payment if proceeds are insufficient

• Provides 5-business-day rescission period without penalty; prohibits financiers from paying referral fees, providing legal advice, directing litigation, assigning contracts, or entering into multiple contracts without paying prior obligations; requires disclosure of financing contracts in civil litigation discovery

• Effective July 1, 2021