Bill Text: TX HB584 | 2017-2018 | 85th Legislature | Introduced

Texas House Bill 584 (Prior Session Legislation)

Introduced

Bill Title: Relating to litigation financing transactions.

Sponsorship: Partisan Bill (Democrat 1)

Status: (Introduced - Dead) 2017-02-20 - Referred to Judiciary & Civil Jurisprudence [HB584 Detail]

Download: Texas-2017-HB584-Introduced.html

	85R2113 GRM-F

	By: Hernandez	H.B. No. 584



	A BILL TO BE ENTITLED
	AN ACT
	relating to litigation financing transactions.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Subtitle B, Title 4, Finance Code, is amended by
	adding Chapter 354 to read as follows:
	CHAPTER 354. LITIGATION FINANCING AGREEMENTS
	SUBCHAPTER A. GENERAL PROVISIONS
	Sec. 354.001. DEFINITIONS. In this chapter:
	(1) "Charge" or "charges" means the amount paid to a
	litigation financing company by or on behalf of the consumer that is
	in addition to the funded amount provided by or on behalf of the
	company to a consumer.
	(2) "Consumer" means an individual who has a pending
	legal claim and who:
	(A) resides in this state; or
	(B) has the legal claim in this state.
	(3) "Funded amount" means the amount provided to or on
	behalf of the consumer under a litigation financing agreement. The
	term does not include a charge.
	(4) "Funding date" means the date on which the
	litigation financing company transfers or otherwise delivers the
	funded amount to the consumer.
	(5) "Immediate family member" means:
	(A) a parent, sibling, spouse, grandparent, or
	grandchild of an individual; or
	(B) a child related by blood, adoption, or
	marriage to an individual.
	(6) "Legal claim" includes:
	(A) a civil action;
	(B) an alternative dispute resolution
	proceeding; or
	(C) an administrative proceeding before an
	agency of this state.
	(7) "Litigation financing agreement" means an
	agreement under which:
	(A) money is provided to or on behalf of a
	consumer by a litigation financing company for a purpose other than
	prosecuting the consumer's legal claim; and
	(B) the repayment of the money is in accordance
	with a litigation financing transaction the terms of which are
	included as part of the litigation financing agreement.
	(8) "Litigation financing company" or "company" means
	a person that enters into a litigation financing agreement with a
	consumer.
	(9) "Litigation financing transaction" means a
	non-recourse transaction in which a litigation financing company
	purchases, and a consumer assigns to the company, a contingent
	right to receive an amount of the potential proceeds of a
	settlement, judgment, award, or verdict obtained in the consumer's
	legal claim.
	Sec. 354.002. NONAPPLICABILITY OF CHAPTER. Except as
	specifically provided by this chapter, this chapter does not apply
	to the following persons who enter into a litigation financing
	agreement with a consumer:
	(1) an immediate family member of the consumer;
	(2) an accountant who provides accounting services to
	the consumer; or
	(3) an attorney who, at the time money is provided to
	or on behalf of a consumer under a litigation financing agreement,
	has an attorney-client relationship with the consumer concerning
	the consumer's legal claim.
	SUBCHAPTER B. AGREEMENT REQUIREMENTS
	Sec. 354.051. FORM OF AGREEMENT. A litigation financing
	agreement must:
	(1) be in writing;
	(2) contain the initials of the consumer on each page;
	and
	(3) be otherwise complete when presented to the
	consumer for signature.
	Sec. 354.052. DISCLOSURES. On the front page of the
	agreement under appropriate headings, the agreement must disclose:
	(1) the funded amount to be paid to the consumer by the
	litigation financing company;
	(2) an itemization of one-time charges;
	(3) the total amount to be assigned by the consumer to
	the company, including the funded amount and all charges; and
	(4) a payment schedule that:
	(A) includes the funded amount and charges; and
	(B) lists all dates and the amount due at the end
	of each 180-day period from the funding date until the due date of
	the maximum amount due to the company by the consumer to satisfy the
	amount owed under the agreement.
	SECTION 2. The changes in law made by this Act apply only to
	a litigation financing agreement entered into on or after the
	effective date of this Act. A litigation financing agreement
	entered into before the effective date of this Act is governed by
	the law in effect on the date the agreement was entered into, and
	the former law is continued in effect for that purpose.
	SECTION 3. This Act takes effect September 1, 2017.