The "Third-Party Litigation Financing Consumer Protection Act" introduces a new chapter in Title 6 of the General Laws in Rhode Island, establishing a comprehensive regulatory framework for third-party litigation financing. The bill defines essential terms such as "consumer," "litigation financer," and "litigation financing transaction." It mandates that all litigation financers must register with the state, which includes filing a surety bond of at least $50,000 and maintaining accurate records with the Department of Business Regulation. All documents related to litigation financing are designated as public records.

The legislation emphasizes consumer protections by prohibiting litigation financers from engaging in practices such as paying or offering commissions, referral fees, or other forms of consideration to legal representatives or medical providers for referrals; advertising false or misleading information; and attempting to influence the conduct of a consumer's legal claim. It requires litigation financing contracts to include clear disclosures about consumer rights and obligations, including the right to cancel the contract within five business days and the terms of fees charged. Additionally, litigation financers must provide complete copies of contracts to consumers and their legal representatives.

The act mandates annual reporting to the Department of Business Regulation, detailing ownership and financing transactions. It specifically exempts litigation financing provided to commercial enterprises in support of commercial litigation from its provisions, while ensuring that personal injury claims remain under its jurisdiction. Any violation of the act or the rules and regulations promulgated under it will render the litigation financing contract unenforceable against the consumer. The act will take effect immediately upon passage.