Bill Text: CT HB05419 | 2012 | General Assembly | Comm Sub
Bill Title: An Act Concerning Nonrecourse Civil Litigation Purchase Agreements.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2012-04-26 - Referred by House to Committee on Finance, Revenue and Bonding [HB05419 Detail]
Download: Connecticut-2012-HB05419-Comm_Sub.html
General Assembly |
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February Session, 2012 |
*_____HB05419JUD___042512____* |
AN ACT CONCERNING NONRECOURSE CIVIL LITIGATION PURCHASE AGREEMENTS.
Be it enacted by the Senate and House of Representatives in General Assembly convened:
Section 1. (NEW) (Effective October 1, 2012) (a) As used in this section:
(1) "Nonrecourse civil litigation purchase agreement" means a transaction in which a civil litigation funding company purchases and a consumer assigns to the civil litigation funding company the contingent right to receive a portion of the potential proceeds of any realized settlement, judgment, award or verdict resulting from the consumer's pending civil action.
(2) "Consumer" means a person who (A) resides or is domiciled in this state, (B) has a pending civil action, and (C) is represented by an attorney at the time such person receives any funds from the civil litigation funding company.
(3) "Civil litigation funding company" means a person or entity that enters into a nonrecourse civil litigation purchase agreement with a consumer.
(b) Each nonrecourse civil litigation company and any employee, agent, subsidiary, successor or assign of the company, who enter into nonrecourse civil litigation purchase agreements, shall comply with the following: (1) A nonrecourse civil litigation purchase agreement shall comply with sections 42-152 to 42-158, inclusive, of the general statutes; and (2) such agreement shall be filled in completely and contain the following disclosures on the first page, in twelve-point or larger bold type, with a heading entitled "Disclosure Statement" and in a form approved by the Department of Consumer Protection in accordance with the provisions of this section: (A) The total amount to be advanced to the consumer; (B) itemization of all fees; (C) percentage fee or rate of return, and stated on an annualized basis, including frequency of compounding; and (D) the total amount to be repaid by the consumer, calculated at six-month intervals, carried forward to thirty-six months, including all fees and any minimum required payment amount.
(c) (1) A nonrecourse civil litigation purchase agreement shall provide that the consumer may cancel the agreement not later than five business days following the consumer's receipt of funds, without penalty or further obligation. Such agreement shall contain the following notice, written in a clear and conspicuous manner: "CONNECTICUT CONSUMER'S RIGHT TO CANCELLATION: YOU MAY CANCEL THIS AGREEMENT WITHOUT PENALTY OR FURTHER OBLIGATION NOT LATER THAN FIVE BUSINESS DAYS AFTER THE DATE YOU RECEIVE FUNDING FROM (insert the name of the nonrecourse civil litigation company).". (2) Such agreement shall specify that, in order for the cancellation to be effective, the consumer must either (A) return the full amount of the disbursed funds to the nonrecourse civil litigation company by delivering the nonrecourse civil litigation company's uncashed check to the office address designated on the disclosure statement, or (B) mail a notice of cancellation and include with the mailing a return of the full amount of disbursed funds, in the form of the nonrecourse civil litigation company's check, a registered or certified check or a money order, by insured, registered or certified United States mail, postmarked not later than five business days after receiving the funds from the nonrecourse civil litigation company, at the address specified for such cancellation in such agreement.
(d) The consumer shall initial each page of a nonrecourse civil litigation purchase agreement. All nonrecourse civil litigation purchase agreements shall contain a legend, immediately above the consumer's signature, in twelve-point or larger bold type, reading: "DO NOT SIGN THIS NONRECOURSE CIVIL LITIGATION PURCHASE AGREEMENT BEFORE YOU READ IT COMPLETELY OR IF IT CONTAINS ANY BLANK SPACE. YOU SHOULD OBTAIN THE ADVICE OF AN ATTORNEY BEFORE YOU SIGN THIS AGREEMENT. YOU ARE ENTITLED TO A COMPLETELY FILLED IN COPY OF THIS AGREEMENT.".
(e) A nonrecourse civil litigation purchase agreement shall contain a written acknowledgement by the consumer's attorney of record stating the attorney has reviewed the agreement and explained its terms to the consumer, including the annualized rate of return used to calculate the amount to be paid by the consumer.
(f) Except when oral negotiations are conducted in another language, a nonrecourse civil litigation purchase agreement shall be printed in both English and Spanish. In the event oral negotiations are conducted in any other language (1) the principal terms of the agreement shall be translated in writing into the consumer's native language; (2) the consumer shall sign the translated document containing the principal terms and initial each page; and (3) the translator shall sign a notarized affirmation confirming that the principal terms have been presented to the consumer in his or her native language and acknowledged by the consumer, in writing. For purposes of this subsection, "principal terms" includes all of the items required by subsections (b) to (e), inclusive, of this section.
(g) If a nonrecourse civil litigation purchase agreement provides for attorney's fees and costs in the case of a breach of the agreement by either party, the agreement shall provide that such attorney's fees and costs shall be reasonable and may be recovered by the prevailing party. Any limitation placed on such attorney's fees and costs shall apply equally to both parties.
(h) A nonrecourse civil litigation purchase agreement shall not require mandatory arbitration to resolve disputes between the parties.
(i) A nonrecourse civil litigation company shall register its name, address and principal place of business with the Department of Consumer Protection and shall provide its standard nonrecourse civil litigation purchase agreement form to be used in this state to the Commissioner of Consumer Protection.
(j) No nonrecourse civil litigation company shall assess interest or fees for any period exceeding thirty-six months from the date the company enters into a nonrecourse civil litigation purchase agreement with a consumer. Such agreement shall contain the following notice, written in a clear and conspicuous manner: "ASSESSMENT OF INTEREST AND FEES: NO INTEREST OR FEES SHALL BE ASSESSED FOR ANY PERIOD EXCEEDING THIRTY-SIX MONTHS."
(k) Any action on the part of a nonrecourse civil litigation company that arises out of a nonrecourse civil litigation purchase agreement with a Connecticut consumer shall be subject to the jurisdiction of this state.
(l) Failure to comply with any provision of subsections (a) to (k), inclusive, of this section shall (1) be an unfair trade practice pursuant to subsection (a) of section 42-110b of the general statutes, and (2) render the nonrecourse civil litigation purchase agreement void with regard to any rights or claims of the nonrecourse civil litigation company.
(m) Nothing in this section shall be construed to render a nonrecourse civil litigation purchase agreement a loan or subject to the provisions of section 37-4 of the general statutes.
This act shall take effect as follows and shall amend the following sections: | ||
Section 1 |
October 1, 2012 |
New section |
BA |
Joint Favorable Subst. |
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JUD |
Joint Favorable |