Proposed Committee Bill CJS 20-01 – Relating to Litigation Financing Consumer Protection
On Wednesday, January 22, PCB CJS 20-01, sponsored and heard by the House Civil Justice Subcommittee, was reported favorable with 15 yeas and 0 nays. AIF’s Senior Vice President of State and Federal Affairs, Brewster Bevis, stood in support of this legislation.
Litigation financing is a non-recourse transaction in which a third party (“litigation financier”) provides funds to a person bringing a civil action or claim in exchange for an assignment of the person’s contingent right to receive an amount of the civil action or claim’s potential proceeds.
The PCB establishes various requirements, such as registering with the Department of State and posting a bond, on litigation financiers. The bill also establishes requirements regarding the contracts, disclosure to consumers, and prohibited conduct. Specifically, the bill caps the fees to $500 for any civil action or claim, regardless of the number of contracts of a litigation financier. Lastly, it provides that violation of the Act is a violation of the Florida Deceptive and Unfair Trade Practices Act.
The PCB is now HB 7041 and will be given committee references.
AIF supports efforts that create transparency and accountability to prevent malevolent litigation financiers from driving up litigation costs, and therefore, driving up the cost to do business in Florida.