House Bill No. 432, introduced by Representative Chenevert, amends existing law regarding third-party litigation financing by establishing new limitations and disclosure requirements. The bill specifies that a litigation financer cannot recover more than the share of proceeds that plaintiffs receive after deducting attorney fees and costs from any monetary damages awarded in civil actions or legal proceedings financed by such agreements. This aims to ensure that the financial interests of litigation financers do not exceed the recoveries of the plaintiffs.

Additionally, the bill mandates that attorneys who enter into litigation financing contracts must disclose the existence of these agreements to their clients and provide a copy within 30 days of being retained or entering into the agreement, whichever comes first. The legislation also clarifies that it does not apply to nonprofit legal organizations that provide pro bono services, ensuring that these organizations are not required to disclose their funding sources. Overall, the bill seeks to enhance transparency and protect the interests of clients involved in litigation financing.

Statutes affected:
HB432 Original: 9:13(B)