Senate
File
2085
-
Introduced
SENATE
FILE
2085
BY
DICKEY
A
BILL
FOR
An
Act
prohibiting
litigation
financing
contracts.
1
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
2
TLSB
5153XS
(4)
89
cm/jh
S.F.
2085
Section
1.
NEW
SECTION
.
537A.7
Litigation
financing
1
contracts
——
void.
2
A
litigation
financing
contract
that
is
a
nonrecourse
3
transaction
in
which
financing
is
provided
to
a
consumer,
4
attorney,
or
law
firm
in
return
for
the
consumer,
attorney,
5
or
law
firm
assigning
a
contingent
right
to
receive
an
amount
6
of
the
potential
proceeds
of
the
consumer’s
judgment
award,
7
settlement,
or
verdict
obtained
with
respect
to
the
consumer’s
8
legal
claim
is
void,
unlawful,
and
unenforceable.
This
9
section
does
not
prohibit
the
provision
of
legal
services
on
10
a
contingency
fee
basis,
or
the
advancement
of
legal
costs,
11
where
such
services
or
costs
are
provided
on
or
on
behalf
of
12
a
consumer
by
an
attorney
representing
the
consumer
in
the
13
dispute
and
in
accordance
with
Iowa
rules
of
professional
14
conduct,
a
commercial
tort
claim
as
defined
in
section
15
554.9102,
or
a
claim
under
chapter
87.
16
Sec.
2.
APPLICABILITY.
This
Act
applies
to
litigation
17
financing
contracts
entered
into
on
or
after
the
effective
date
18
of
this
Act.
19
EXPLANATION
20
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
21
the
explanation’s
substance
by
the
members
of
the
general
assembly.
22
This
bill
prohibits
litigation
financing
contracts.
23
Litigation
financing
contracts
are
agreements
between
a
third
24
party
and
a
plaintiff,
an
attorney,
or
a
law
firm
of
a
civil
25
action
in
which
the
third
party
provides
funding
for
legal
26
expenses
in
exchange
for
a
percentage
of
any
settlement
or
27
judgment.
The
bill
does
not
prohibit
the
provision
of
legal
28
services
on
a
contingency
fee
basis,
or
the
advancement
of
29
legal
costs,
where
such
services
or
costs
are
provided
on
30
or
on
behalf
of
a
consumer
by
an
attorney
representing
the
31
consumer
in
the
dispute
and
in
accordance
with
Iowa
rules
of
32
professional
conduct,
a
commercial
tort
claim,
or
a
claim
under
33
Code
chapter
87
(workers’
compensation).
34
The
bill
applies
to
litigation
financing
contracts
entered
35
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2
S.F.
2085
into
on
or
after
the
effective
date
of
the
bill.
1
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2