The bill amends Title 9 of the General Laws by adding a new chapter, CHAPTER 3.1, titled "LITIGATION LENDING AGREEMENTS." It establishes that litigation financing contracts, where companies advance money to litigants in exchange for repayment from litigation proceeds, often carry effective annual interest rates that can exceed one hundred percent (100%). The General Assembly finds these rates detrimental to the general welfare of the citizens of the state and aims to ensure that such agreements conform to state laws governing usurious loans.

Under the new provisions, a "litigation lending agreement" (LLA) is defined as any agreement whereby funds are paid to parties to civil litigation (litigants) in consideration for a litigant's agreement to repay these funds (with or without interest, one-time charges, use fees, or any other add-on charges) from the proceeds of the litigation. The bill clarifies that any payments made by a litigant under an LLA that exceed the amount received by the litigant will be considered interest on loans, thus subjecting them to the provisions of chapter 26 of title 6 ("interest and usury"). This applies regardless of how the LLA is characterized, the terms used for repayment, or whether the obligation to repay is contingent upon a particular outcome of the litigation. The act will take effect upon passage.