The "Third-Party Litigation Financing Consumer Protection Act" introduced in this bill seeks to regulate the practice of third-party litigation financing in Rhode Island. The bill defines key terms related to litigation financing and requires that all litigation financers be registered in the state, either as a business entity or as an individual or partnership. It mandates a surety bond of at least $50,000 for financers and sets forth prohibitions, such as not paying referral fees, not advertising misleading information, and not attempting to waive a consumer's right to a jury trial. The bill also specifies that all documents filed under this section are to be public records. It prohibits financers from offering legal advice, making decisions regarding the consumer's legal claim, and reporting consumers to credit agencies for insufficient funds to repay the financer. Legal representatives and medical providers are not allowed to have a financial interest in litigation financing and cannot receive referral fees from financers.

Furthermore, the bill requires that litigation financing contracts be written with complete terms and include specific disclosures in bold font, such as the consumer's right to cancel within five business days and a cap on fees charged. Legal representatives must disclose any litigation financing agreements to their clients and acknowledge the absence of referral fee transactions with the financer. The bill also mandates that the existence of litigation financing arrangements be disclosed to all parties in a litigation and be subject to discovery. Litigation financers must file an annual report with the secretary of state, including information about any person or entity that owns five percent or more of the voting securities of the financer. The secretary of state must provide an annual report to the house and senate judiciary committees, which will remain confidential and not subject to public records laws. The bill exempts litigation financing provided to commercial enterprises for commercial litigation, except in cases arising from personal injury claims, and states that any violation of the chapter will render the financing contract unenforceable. The act will take effect upon passage.