Sen. Head has introduced SB 5, concerning consumer legal funding. This is meant to regulate transactions in which an outside business provides litigation funding for a natural person in exchange for a contingent interest in the outcome of the litigation.
The bill requires consumer legal funding companies to be registered in Indiana. It requires the contract to provide certain funding information and to allow the contract to be rescinded within 30 days of the funding date (provided the funds are remitted to the company.) It also requires a provision that waives the company’s right to control the litigation – leaving that right to the plaintiff and the plaintiff’s attorney. It further gives attorney’s fees, health provider liens, and subordination agreements priority over the consumer legal funding contingency agreement.
It makes violation of the requirements a deceptive consumer act, actionable by the attorney general.
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