Bill Text: IN HB1206 | 2012 | Regular Session | Introduced

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Bill Title: Third party lawsuit lending.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Introduced - Dead) 2012-01-09 - First reading: referred to Committee on Judiciary [HB1206 Detail]

Download: Indiana-2012-HB1206-Introduced.html

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Introduced Version

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HOUSE BILL No. 1206

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DIGEST OF INTRODUCED BILL

Citations Affected: IC 24-11.

Synopsis: Third party lawsuit lending. Prohibits a loan to a plaintiff in an action in exchange for the contingent right to receive a part of the potential proceeds of the action.

Effective: July 1, 2012.

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Culver, Foley, Steuerwald

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    January 9, 2012, read first time and referred to Committee on Judiciary.

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Introduced

Second Regular Session 117th General Assembly (2012)

PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
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HOUSE BILL No. 1206

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    A BILL FOR AN ACT to amend the Indiana Code concerning trade regulation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 24-11; (12)IN1206.1.1. -->     SECTION 1. IC 24-11 IS ADDED TO THE INDIANA CODE AS A NEW ARTICLE TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2012]:
     ARTICLE 11. PROHIBITED LEGAL FUNDING
    Chapter 1. Definitions
    Sec. 1. (a) As used in this article, "legal action" means:
        (1) a bona fide civil action or statutory claim in which damages may be awarded; or
        (2) a cause of action or legal claim upon which a civil action or statutory claim described in subdivision (1) may be based.
    (b) The term includes:
        (1) any settlement or negotiations toward settlement of a civil action described in subsection (a)(1); or
        (2) any agreement or negotiations toward an agreement under which a civil action based upon a cause of action described in subsection (a)(2) would not be initiated.
    Sec. 2. As used in this article, "legal funding transaction" means

a transaction in which:
        (1) a lender provides legal funding to another person; and
        (2) the person receiving the legal funding assigns to the lender the contingent right to receive a part of the proceeds of the settlement, insurance payment, or award of damages obtained in the person's legal action.
    Sec. 3. As used in this article, "lender" means a person or entity that enters into a legal funding transaction with a person.
    Sec. 4. As used in this article, "person" means an individual, a partnership, a corporation, a limited liability company, or another organization.
    Chapter 2. Legal Funding
    Sec. 1. (a) A lender may not enter into a legal funding transaction with another person.
    (b) A legal funding contract entered into in violation of this section is void.
    Sec. 2. (a) A violation of this chapter is a deceptive act that is actionable by the attorney general.
    (b) The attorney general may bring an action under this article to obtain any or all of the following:
        (1) An injunction to enjoin future violations of this chapter.
        (2) A civil penalty of not more than ten thousand dollars ($10,000) per deceptive act.
        (3) The attorney general's reasonable costs in:
            (A) the investigation of the deceptive act; and
            (B) maintaining the action.